The New Deal Era in America Research Paper

Introduction

The New Deal era in America had its beginnings in the 1920s and officially spanned from 1933 until well into the 1960s. Although this period is historically viewed as the beginning of modern liberalism, this period of reforms due to an economic catastrophe had no ideological regularities. The Government formed programs to help alleviate a country suffering from severe economic depression following the stock market crash of 1929 and was not principally concerned from which ideological faction the ideas originated. President Roosevelt (FDR) along with advocates of the New Deal within the government seeking to restore the country’s economic vitality had seemingly two options. They could either develop programs from the bottom-up by federally generated job creation and welfare benefits thus forming a social partnership with racial minorities and the working class including labor unions or they could give businesses the freedom to correct the economy itself by expansion thus creating more jobs which would pump money back into the economy. Contrary to popular historic perceptions, the country was hardly moving in a socialist direction. The New Deal represented the prevailing capitalist societal structure culture as, for an example, its policy continued the division between what was considered the worthy poor, mostly widows and their children, and the ‘unworthy’ poor, which included just about anyone else, who were disregarded.

The First New Deal

The First New Deal (1933 to1934) decidedly orientated governmental policies toward big business. The Second New Deal which began in 1935 was less pro-business in position, but in practice continued to support top-down economic growth. Later in this stage of reform, the government increased its focus on antitrust enforcement and stronger regulations on business regulation but ultimately, big business maintained influence over essential decisions concerning investment, pricing, and production. In addition, the government-assisted industry by limiting competition. Rather than attempt to regulate businesses, New Deal advocates wanted to greatly increase the size and control of the government so that it could act as a counterbalance to private sector industries (Yantek, n.d.). When Roosevelt took office; the government was fairly simple in design with functions primarily limited to the necessities of administration. Afterward, it was altered into a multifaceted agency controlling business and intruding into citizen’s liberties. “It is no exaggeration to say that he took the government when it was a small racket and made a large racket out of it” (Ebeling, 1998, p. 15).

Roosevelt, as he repeatedly claimed, restored optimism to the American people after they had descended into misery as a result of the depression and that his New Deal policies ‘saved capitalism.’ Harry Truman to attempt to complete this mission implemented the Third New Deal after World War Two labeling it the ‘Fair Deal’ (Yantek, n.d.).The main mission of Roosevelt’s New Deal administration was the rescue of American capitalism. Roosevelt solicited the support of businesses in fulfilling this mission. Roosevelt informed business tycoons who protested his policies, that the New Deal was security for the ‘farsighted conservative.’

Some historians claim that Roosevelt intended the government’s involvement in the economy to be somewhat limited. His objective of the New Deal was not to force a communal endeavor that socialist or communist governments employed in Europe. He sought neither big business nor the swiftly budding labor unions to become controlled by the government or the other way around (Yantek, n.d.). His New Deal ideology attempted to sustain both industrial rights and personal economic security, both perceived as essential components of American citizenship. Just as all things contain their opposite within itself; this was certainly accurate of the outside and inside influences surrounding the Roosevelt administration. The historical contradictions that persist even today regarding the intent of the New Deal are explainable by the differing dynamics of the time.

The New Deal, while serving to save capitalism primarily by alterations within the government structure, internal alterations, was complemented by programs of domestic reform. Roosevelt did not arrive at the New Deal policies on independent or personal reasoning but as the result of the continuing divergence of forces surrounding him. The economic conditions of the time demanded that the solutions foster relations between the capitalist class and the working class, each of whom had opposing interests. Those within the working class had differing interests as well. “While labor unions lobbied for employers’ liability laws, social reformers worked for maximum hours for women workers, minimum wages, factory inspections, child-labor laws, and anti-sweatshop laws” (Baker, 2003). New Deal advocates and labor unions viewed the citizen’s right to social security and access to health care as a matter of class equality. In 1938, the Roosevelt administration held the National Health Conference where more than 150 activists groups were represented including labor unions, social workers, farmers, women’s and medical organizations. Following WW2, the connections between government policy, social security, and business relations, a vital element of the New Deal, became progressively separated.

As employers sought to impede the growing influence of labor unions, it was thwarted by the increasing involvement of the government in labor relations. Industry perceived this as ‘politicized bargaining’ from the unions who had been lobbying their view of the New Deal in Washington for many years. During the 1950s, business leaders sought to even the balance of power between themselves, the government, and labor. “In the 1950s, business interests were able to alter the role of the state in industrial relations politics, and in fact to use it to sustain an increasingly insular, private, firm-centered definition of security” (Klein, 2004). Though successfully redirecting the balance back toward big business, the hierarchal political-economic order of the pre-Depression era was not completely restored.

According to many, the New Deal was successful only in creating a new economic predicament instead of bringing its touted prosperity. Despite extraordinary fundamental changes and reforms brought about by the New Deal, the economy had not accomplished the levels of production that were present before the stock market crash. The working class was very dissatisfied as their standard of living had steadily declined. The national income per person in 1938 was also much less than it was in 1929. Unemployment was escalating and farmers faced a crisis of their own. Governmental assets deteriorated by the year and neither civil nor world peace were foreseeable shortly. The economic calamity of 1937 presented the Roosevelt administration with new challenges.

The failure of the New Deal

The failure of the New Deal to strengthen the economy caused Roosevelt, the spokesperson of industry and capitalist wellbeing, to develop a new policy. Roosevelt and his supporters in congress followed the path of least resistance by following the persistent demands of the big business interests. Immense world events were occurring outside the U.S. while the New Deal was attempting to solve economic problems within the country. Germany and Japan were attempting to challenge America’s hold on world domination and Wall Street applied pressure upon Washington to neutralize this challenge. “Roosevelt, ever the opportunist, saw a way out of the crisis and Wall Street’s mission became his own” (Novack, 1940). The war policy under Roosevelt illustrated how, under the capitalist objectives, the aims and interests of big businesses coerce themselves through against all barriers until they become the official governmental programs. The twentieth century’s dominant theory was that of a ‘rational capitalism.’ “In the wake of the greatest set of horrors the world had ever seen, accompanied also by the rise of an alternative, contending system in the Soviet Union, it was necessary for capitalism following the Second World War to reestablish itself ideologically as well as materially” (Foster, 2005).

From the early beginnings of the New Deal, the inclination to adhere to opposing forces and points of view was present within the Roosevelt administration. The internal contradictions and external pressures during reformations of the New Deal only served to negate the intended experiments regarding social development. These two lines of thought are related to the interests of different social forces. The reformists reproduced the influence of the working class and their supporters among the labor unions. Oppression and the New Deal were not simply different methods adopted by big businesses to deal with the working-class revolution for social justice. According to some, they were techniques of preparing the country for war. After the failures of the New Deal, a predisposition for militarist conquests by industrialists sought to solve the economic troubles facing the American capitalist way of life by external measures thereby extending the capacity of its economic rule over other countries of the world. The militarist wing represented the outlook and interests of the big business, which proved to be the actual leaders of the United States under the guise of social reforms of the New Deal.

Conclusion

Today, incomes are again becoming disproportionate. The wealthy again own the greater share of the nation’s wealth while the middle class is increasingly slipping into the ranks of the working poor. This combined with poor economic strategies and the exploding National Debt still threatens to plunge America into another Great Depression potentially much worse than the catastrophe of the 1930s. This economic doomsday scenario came very close to occurring last year. As the stock market continues to wobbly regain confidence and working people are threatened daily with job, home and health insurance loss banks still are reluctant to extend a business’ line of credit which continues to keep America on the brink. This is all despite taxpayer money being pumped into the banking and other financial institutions as a means of ‘saving’ them from economic ruin. President Barack Obama has been and will continue to implement his own New Deal strategies to preserve America into the future.

Works Cited

Baker, Dorie. “Yale Professor Writes Book on American ‘Security’ System.” Yale News Release. Yale University, 2003.

Ebeling, Richard M. Ebeling. “Monetary Central Planning and the State, Part XIV: The New Deal and Its Critics.” Freedom Daily, 1998.

Foster, John Bellamy. “The End of Rational Capitalism.” Monthly Review. V. 56, N. 10, 2005.

Klein, Jennifer. “The Politics of Economic Security: Employee Benefits and the Privatization of New Deal Liberalism.” The Journal of Policy History. Vol. 16, N. 1, 2004.

Novack, George. “Autopsy of the New Deal.” Fourth International. Vol. 1, N. 1, 1940, pp. 10-13.

Yantek, Tom. “The New Deal: Capitalism Loses its Hat.” Kent State University.