From The New International, Vol. XXIV No. 2–3, Spring–Summer 1958, pp. 104–115.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
There is at present a most justified trend among liberals and socialists to take a new look at the New Deal. This is necessary in order to develop a more serious, time-endowed approach to the problems and politics of the society which emerged from the social upheavals of the nineteen-thirties. This article is a tentative effort to chart a course through the policies of the New Deal administration, to look for a general tendency in the multiplicity of historical data.
The greatest disservice to those who seek an understanding of the New Deal is the repeated emphasis on the pragmatic and multi-sided quality of its program. The usually brilliant historian, Richard Hofstadter, for example, in The Age of Reform commented about Franklin Roosevelt: “Unlike Hoover, he had few hard and fast notions about economic principles, but he knew that it would be necessary to experiment and improvise.” From this, Hofstadter goes on to discuss the pragmatic nature of the New Deal.
As an item in the biography of Roosevelt this idea has some truth. But this does not tell much about the objective direction of the New Deal. One cannot understand the New Deal as nothing but an item in the biography of one man for the result is intellectual chaos.
All historical periods are in fact multiplicity, diversity, experimentation. All periods present a motley array of facts. It is the task of the historian to arrange and interpret them in some useful fashion, to find the main drift in an inchoate sea of facts.
Hofstadter, without fully recognizing it himself, offers a key to the understanding of the New Deal. In the chapter on the period in The Age of Reform there are two themes. Of the major one he writes, “The demands of a large and powerful labor movement, coupled with the interests of the unemployed, gave the later New Deal a social-democratic tinge that had never before been present in American reform movements.” As a secondary theme he writes, “The New Deal began not with a flourish of trust-busting but rather, in the NRA, with an attempt to solve the problems of the business order through a gigantic system of governmentally underwritten codes that would ratify the trustification of society.” I shall take these two themes as central but I shall reverse the order of their importance and interpret the social-democratic tinge in the light of the primacy of the trustification of society.
ONE MUST GO BACK to the years immediately preceding World War I in order to understand the development of the New Deal program. The group that created and wrote for the liberal journal, the New Republic, formulated a liberal creed which finally was realized under the New Deal.
The New Republic ideologists were opposed to the rapaciousness of monopoly capitalism. They looked toward a pragmatic, experimental, middle class democracy, based on science and industry. Class division would be healed by social cooperation, irresponsible power would be socialized and made responsible, economic crisis and poverty would be ended by governmental planning. Power was to go to a powerful executive and a permanent administrative group. A powerful central government able to plan and experiment and control was to be created.
This image of the welfare state was combined with acceptance of economic concentration under capitalist property relations. Some industries such as power and transport might be nationalized, but the economy would remain private-property corporate capitalism.
The New Republic liberals in abandoning the attempt of the old liberalism to stop concentration aimed for social harmony. All labor must be organized into unions for only then could it be “responsible.” Business, the farmer, labor, and government would all cooperate with one another. Every class and social element would have its place in society, its assigned share and its consequent responsibility. Only then could American democracy go forth and take responsible leadership in the world. “Prophets of progress who were sure the dice of history were loaded in their favor” the New Republic editors welcomed Wilson’s declaration of a crusade to make the world safe for democracy. [1]
This ideology is one of the variants of modern corporatism: the harmony of social classes enforced by a state standing above and separate from social conflict. The liberal version might be called democratic corporatism in order to distinguish it from the totalitarian corporatism of fascism. While one must very carefully separate the former from the latter, they both utilize the growth of the power of the executive, the centralized state and cartelized industry as the three-pronged means to solve the problems of capitalist society and both limit democracy by removing the crucial decisions of society from popular control.
This liberal ideology is a curious mixture of old and new. The base is the ideology of the old, agrarian, middle class democracy based upon widely-owned property and a minimal state. The ideology is then combined with a program based upon the cartelization of society in which the number of property owners is drastically reduced and the power of the state greatly increased. In short, a Jeffersonian ideal is combined with a Hamiltonian program!
The New Republic liberalism was developed by a group of economists in the nineteen-twenties who gave it a more specific program, complete with technocratic overtones. Led by Wesley Clair Mitchell, they built on Thorstein Veblen’s emphasis on rationality and technology, while ignoring his radical social criticism. They looked to the engineers, the technicians, the professional classes, those in whom the Veblenesque instinct of workmanship pulsated most insistently, as the carriers of social change. They were concerned with the rationality of production; they were not particularly concerned with the redistribution of income and major social structural change. Their basic interest was with “industrial government,” government regulation of industry; they opposed the anti-trust laws as being unworkable and as leading to inefficiency.
Even though some of these men, such as Rexford Tugwell and Professor (now Senator) Paul Douglas, were involved in the activities of the social- democratic League for Industrial Democracy, they were not socialists, but planners. They had elitist conceptions; they had no sense of commitment to socialism as the political movement of the working-class.
Several of these figures, most notably Rexford Tugwell and Adolph Berle, became the heart of the “Brain Trust” which Franklin Roosevelt assembled in 1932 and 1933 to be the idea men for the new administration.
IN EARLY 1933 TUGWELL ISSUED a call for a government-administered economy in a volume, The Industrial Discipline and the Governmental Arts, which was a codification of what he had been saying throughout the nineteen-twenties.
Tugwell did not advocate the nationalization or socialization of industry; he did advocate placing power to control the overall functioning of the economy in the hands of the state. The state would provide a full security program. It would carefully regulate production in order to guarantee “fair service at fair prices.” The Federal government would control and supervise through the taxing power the flow and investment of capital; it would control prices; it would protect certain weaker sectors of the economy, such as small business, consumers, farmers, and technicians.
Above all, the state would encourage corporate integration rather than attempting to prevent or limit it. Such integration would be controlled by a central industrial integration board which would represent the peak trade associations in each industry, and the government. The central integration board would have power of review of trade association policies with respect to security issues, prices, adequate wages, production levels and standards, and working conditions. It would encourage patent-pooling and other cartelizing devices. All corporations would be induced to join the plan by special tax arrangements that would work to the disadvantage of non-members.
Adolph Berle also had developed a similar program, the major development of which stemmed from his classic study (with Gardner Means) of The Modern Corporation and Private Property. Berle recognized and accepted the tremendous social power that concentration had placed in the hands of the corporate leadership. He looked for a government sponsored program of self-government in industry which would prevent social chaos, the large fluctuations in the business cycle, and dishonesty. Ultimately, he called for a socially-responsible and moral corporate leadership.
These ideas of Tugwell and Berle were in accord in major respects with those being developed at the same time by the economic titans of American capitalism. Gerard Swope, President of General Electric, and the United States Chamber of Commerce, had similar proposals. Business magazines and corporate leaders seconded their ideas. Above all, Bernard Baruch and those around him, most particularly General Hugh Johnson and farm-implement maker, George Peek, were the most influential in developing these ideas. The basic conception was the one that Herbert Hoover, when Secretary of Commerce in the Harding Administration, had advanced: self-government in industry, i.e., responsible cartelization.
Baruch, as Tugwell, relied upon common integration forums, representative of the trade associations in each industry, and sponsored by the state. The channeling of investment and the control over the level of production, the wages of labor, the conditions of sales and marketing, particularly specifications as to quality and some agreement on prices were to be decided on by these forums. Government price controls were to be avoided.
Hugh. Johnson prepared a report for a committee created by a group of bank and insurance companies which were heavy investors in railroad and other transport securities which gives a clear picture of what he and his colleagues were aiming at, shorn of confusing liberalistic phraseology. The report, signed by Baruch, former president Calvin Coolidge and former New York State governor Alfred Smith, called for the end of government efforts to “create and foster competition with or among railroads as a defense against monopoly.” Parallel and competing lines were to be eliminated, the railroads were to be consolidated into a single National System. In those cases where waterways or truck routes could provide cheaper and more efficient service, no attempt should be made to support railroads artificially.
This was a program for finance capitalism, which, standing at the peak of capitalist society, can identify its own welfare with that of all society. It is interested in all possible areas of investment, against the concern of monopoly capitalism for specific sectors of the economy. Finance capitalism has as its interest the functioning of the entire capitalist social system for, after all, what is important for it is a return on the total capital invested, whether it be in railroads, waterways, truck lines, or in industries other than transport.
The advocates of a program of cartelization encouraged within limits the creation of mass industrial unions, single industry-wide bargaining agents which could help impose upon an entire industry wage rates high enough to drive out all marginal producers. Hugh Johnson in this respect declared in his autobiography, “In my opinion it is only in organization of all the workers in this country that we can hope for balance in our economic structure.” It is clear that by “balance” he meant the system of cartelization. In this he was not alone among the corporate leadership.
These leaders of American capitalism had a similar program for the agricultural sector of the economy, designed to solve the long-term agricultural depression. American farming had been steadily mechanized and concentered, the number of farm owners declining sharply in the nineteen-twenties while the number of sharecroppers and tenant farmers rose. But despite the concentration, the per capita income available for farmers was much lower than that available to the non-farm population. The development of a highly integrated industrial capitalist economy left a non-rationalized agricultural industry lacking adequate marketing and price-fixing institutions and faced with the special tariff-supported privileges of manufacture.
To meet this problem, George Peek and the leaders of the Farm Bureau Federation, representing the large staple-crop producers and the food processors and farm equipment manufacturers, agitated for a government-supported program of removing surpluses from the domestic market and maintaining agricultural prices on a level with that of the boom years 1909–1914. They presented this program with lack of success to the Republican Convention of 1928; they then went across the street and sold it in principle to Al Smith and the Democrats. In the form of the McNary-Haugen Bill it reached Congress but was not passed.
THE PROGRAM OF THE FIRST YEARS of the Roosevelt Administration followed closely along the lines of these plans that I have been discussing: the end of trust busting, the rationalization of industry and agriculture, self-government in industry, government-sponsored cartelization.
The heart of the New Deal program was a series of acts, passed in the first Roosevelt administration, designed to create permanent changes in the organization of society along the lines of the ratification of the trustification of society. The first area for reconstruction was banking and finance.
The banking system had been showing signs of trouble throughout the prosperity of the nineteen-twenties. Nearly seven thousand banks had become insolvent and closed their doors during the decade; the great bulk of these were in agricultural areas. With the 1929 Stock Market Crash the entire American banking system began to fall apart. Bank failures became wholesale. On the eve of the 1933 inauguration the banking system had totally collapsed and state governors had declared “bank holidays” in most of the states. The first act of the new administration was to declare a four-day bank holiday for the entire nation.
A long-term strengthening of the banking structure was attempted in the Banking Act of 1933, which grew out of Congressional investigations in 1930 and 1931. The Federal Reserve System needed tightening and more power in order to provide a central control over the banking system, to provide a mechanism which would keep the entire banking system in operation by regulating its individual parts. The interests of individual bankers in uncontrolled speculation had to be sacrificed in order to protect the entire system.
The Banking Act of 1933 divorced investment banks from commercial banks. It undertook to curb the use of Federal Reserve credit for speculative purposes by requiring that each Federal Reserve Bank continually investigate bank loan procedures, and provided that an offending bank might be refused accommodations or be formally suspended from use of Federal Reserve facilities. In other ways, it acted to tighten up the banking system and to limit speculative loans. The Federal Reserve Board was strengthened so that it could provide some of the rationalizing and stabilizing functions of a central bank. Individual deposits were insured through the Federal Deposit Insurance Corporation in order to protect the depositors and restore confidence in the banking system. In 1935, the Congress under the direction of the administration and the Federal Reserve Board, went further in strengthening the powers of the Federal Reserve Board, giving it wide control over credit extension. The chairman of the Board, Mariner S. Eccles, declared in this connection, “laissez faire in banking and the attainment of business stability are incompatible.”
In the Securities Act and the Exchange Act and the organization of the Securities and Exchange Commission to regulate the stock-market, the New Deal created another element of enforcing “self-government” in industry. It was designed to police the practices of corporations in the offering of securities on the market.
The agricultural plan adopted by the New Deal was that worked out by George Peek and the Farm Bureau Federation with some modifications. The Agricultural Adjustment Act of 1933 passed in the midst of widespread misery was based upon the drastic restriction of agricultural production! The act undertook to “re-establish prices to farmers at a level that will give purchasing power ... equivalent to the purchasing power of agricultural commodities” in a base period of 1909–1914. The government paid farmers to destroy crops and livestock already in production, and to remove from production a percentage of the farm land, and made commodity loans to permit producers to hold certain commodities off the market until prices improved. This last provision left the government holding millions of dollars worth of farm commodities which had been the collateral to secure these loans.
In line with the general support of the New Deal for the ratification of the trustification of society, the government encouraged and at times required, marketing agreements between producers’ cooperatives, processors, and distributors, for the purpose of raising or maintaining prices.
The first Agricultural Adjustment Act was declared unconstitutional by the Supreme Court in 1936 because its operations had been financed by a tax levied on the processors of agricultural goods. In subsequent acts of 1936 and 1938, the basic outlines of the AAA were kept intact, indeed strengthened, utilizing means more acceptable to the court.
The result of the AAA in immediate and long-run terms was the further mechanization, industrialization, and economic concentration of the farming land. Hundreds of thousands of farmers were pushed off the land by the combination of the AAA and the dust storms of the mid-thirties. The benefits paid to farm owners for acreage reduction were only rarely given to the tenants and sharecroppers. Indeed, the tenants and croppers were reduced to the status of farm laborers as land was removed from production, tenants were expelled from the land, and holdings thrown together. The tractor, often bought with government acreage reduction checks, was the major cause of the flood of Okies and Arkies who were pushed off the land to wander the country looking for work.
THE TOUCHSTONE OF THE NEW DEAL program for American capitalism was the National Recovery Administration which was taken directly from the plans of Baruch, Tugwell, and Berle. While the NRA was to be declared unconstitutional, its results were lasting.
The National Recovery Administration convened meetings of the peak trade associations in each industry for the purpose of formulating a code covering all conditions of production and distribution. These codes were to be enforced by the abandonment of the anti-trust legislation and by moral coercion. Required trade practices that were most important in the codes were minimum price maintenance, uniform methods of cost finding, price filing, specified discount and credit terms, standard contracts, specified standards of bids and quotations, classification of customers, and limitation of machine and plant hours or of industry capacity. A host of usual competitive practices were prohibited such as commercial bribery, spying on competitors, imitation of trade-marks or designs, price discrimination, “tie-in” sales, “style piracy,” and the enticement of employees from rival firms.
The National Industrial Relations Act included a section 7(a) which guaranteed the right of collective bargaining to labor. There is little doubt that it gave a tremendous impetus to the organization of mass industrial unionism. It had been introduced as labor’s price for support of codes drawn-up for the most part without its participation. Furthermore, it had been introduced to stem-off the A.F. of L.’s drive for the Black-Connery thirty-hour maximum work-week bill. Industry was willing to grant the right of labor to organize in return for government sanction of cartelization. Within limits, the peaks of capitalist industry did not oppose unionization for it would raise wage rates and thus further the cartelization process by driving-out marginal producers.
The NRA was declared unconstitutional by a conservative Supreme Court in 1935 and, unlike the first AAA, was not replaced. Big business had become leery of the government’s cartelization role and felt that now that the anti-trust laws had been almost destroyed, they could continue the process without government-sponsorship. However, certain provisions were made into special acts of legislation, the most important of which was the Miller-Tydings Act of 1937 legalizing retail price maintenance and administered prices for advertised products in interstate commerce. The cartelization drives of the New Deal continued into the late nineteen-thirties with the legislation creating the Civil Aeronautics Administration guaranteeing a carefully-cartelized structure for the entire new aviation industry. While the New Deal did make a motion in the direction of breaking-up the trusts in the late nineteen-thirties with the strengthening of the anti-trust division of the Department of Justice, this was largely a sham. The man placed in charge of the division was Thurman Arnold who, in his The Folklore of Capitalism, ridiculed the attempts to destroy or regulate the trusts!
THE HOARIEST AND MOST COMMONLY repeated of all stories about the New Deal is that it somehow consciously adopted Keynesian economics with its emphasis on the unbalanced budget, deficit financing, and other inflationary methods. This is almost pure myth. The New Deal fought hard to follow a conservative program, to maintain a balanced budget, to reduce government expenditures, to borrow rather than tax, to follow a moderately deflationist policy.
It is true that the New Deal’s left-wing, led by Harry Hopkins, Aubrey Williams, Harold Ickes, and Tugwell, fought for increased government spending, particularly for the relief program. But what the liberal historians fail to recognize is that the left-wing almost consistently lost its battle to such right-wing New Dealers as Johnson, Jesse Jones, Henry Morgenthau, Jr., Lewis Douglas et al. Franklin Roosevelt acted almost consistently in the direction of a moderately deflationary program.
The history of the New Deal’s relief program demonstrates this fact most clearly. Throughout 1933, 1934 and 1935, the relief budget kept rising. But as soon as it was felt that total social collapse had been stoped, the New Deal attempted to cut-back the relief appropriations.
At the end of 1935, the President announced that he was going drastically to reduce the relief program in order “to restore business confidence." In early 1936, he submitted a budget to Congress which called for cutting-in-half the total expenditures for relief so as to provide a virtually balanced budget. Only Congressional action prevented some of the more drastic cuts. Congress, for example, limited the cut in the number to be employed by the Civilian Conservation Corps. Only 250,000 men were to be dropped. The President had proposed dropping 300,000. It is often argued that Roosevelt could have gone further if Congress had allowed him. This is almost pure fiction. It is more accurate to report that Congress was most often to the left of the President, which is not surprising, for it is more sensitive to popular moods.
The drive to cut relief appropriations continued throughout 1936 and 1937. It was momentarily stopped by an economic downswing in the late fall of 1937, which economists have attributed directly to the devastating impact of the budget-balancing activities of the New Dealers! A temporary rise in relief funds was voted in early 1938, but the slightest sign of recovery later in the year, led to further administration-sponsored relief cuts. Even before the effect of defense spending was felt in late 1939 and early 1940, the relief budget had been slashed from two and a half billion dollars for the fiscal year ending June 30, 1938 to one and three-quarter billion dollars for the year ending June 30, 1939!
WITH THIS DISCUSSION of the New Deal’s relief program we are into the heart of the “social-democratic tinge” of the Roosevelt program. It is difficult to understand why there has been this insistence upon giving primacy to the “social-democratic tinge” when analyzing the New Deal for most of it was of the nature of the relief program certain measures grudgingly extracted by mass pressure. The labor movement was not directly involved in the direction of the New Deal until the war period; before the 1936 election it stood outside the New Deal. It was only with the initiation of the defense-production program that the labor movement was involved with making government decisions. Before that, with the exception of one ultra-conservative AFL official who was the figurehead director of the Civilian Conservative Corps, no one from labor’s ranks was even nominally important in the New Deal.
The “social-democratic tinge” refers in addition to the relief program to four major acts of legislation: the creation of the Tennessee Valley Authority, the Wagner Labor Relations Act, the Social Security Act, and the Fair Labor Standards Act of 1937. While all of these measures did represent major progressive steps, they did not represent a revolutionary change in American society, they were most modest in their aims, they were an integral part of a program designed to protect the over-all interests of the capitalist social system as against the special interests of its individual parts.
In the conservation program, the Rural Electrification Administration, and the Tennessee Valley Authority, the New Deal sacrificed the interest of specific capitalist combinations, e.g., certain lumber corporations and private power corporations, to the overall needs of a capitalist economy. Conservation enabled a wide range of lumbermen, farmers, and mine owners to exploit the natural resources of the country over a long period; it stood for the national capitalist interests as against parochial ones. Rural Electrification represented part of the farm program of the New Deal and it was one of the steps in effectively integrating the South into a national economy. TVA in providing cheap electric power brought an entire region back to life and brought industry into that region which had not previously been there. Indeed, in the long run the private power companies benefited by the increased demand for electricity brought by TVA. While TVA was a publicly-owned development corporation, a public sector of the economy, it, no more than European government-owned railroads, was a socialized sector of the economy. Not only did TVA not alter the basic capitalist social relations, it helped strengthen them by bringing an entire area of the country into the orbit of industrial capitalism. TVA must be counted a progressive gain just as historically, capitalism was progressive. Progressive, yes; social democratic, no.
The Social Security program came as a result of the depression and widespread unemployment. The states which had traditionally been responsible for the relief of the unemployed had been unable to meet this obligation. The Federal government had to step in to underwrite state aid. Special aid had to be available for old people for they represented a large percentage of those on relief rolls. From the point of view of the large taxpayers, social security made both sound social and economic sense. Would it not be better to have an insurance scheme in which at least half of the money for unemployment relief would come from the potential unemployed themselves rather than placing the entire burden on the taxpayer? And would not an insurance scheme which would spread out the risk over all the potential unemployed further cut down the cost to the taxpayer? The New Deal social security legislation was neither radical nor particularly liberal. It was only an example of the fact that United States capitalism had finally reached the level of German and British capitalism which had supported social security insurance schemes for decades.
THE WAGNER ACT REPRESENTED a major concession to the labor movement as part of the efforts of some Democratic Party leaders to tie the labor movement to their party. It was not, however, an administration measure. It did not, indeed, receive the support of the President until after it had passed the lower house of Congress. New Deal Secretary of Labor, Frances Perkins, herself not a major proponent of the bill that guaranteed the right to collective bargaining, has written that the Wagner Act “was not a part of the President’s program. It did not particularly appeal to him ...”
The major support for the bill came from the labor movement and from certain big-city Democratic leaders, most notably Senator Robert Wagner of New York. While it was true that Wagner’s long-standing relationship with the AFL, his conviction that industrial peace would be promoted by the act, and that unionization would insure high purchasing power, were motivating factors in his support, the crucial concern was more direct. Wagner came from the ranks of Tammany Hall which could control the city with the support of the urban, immigrant working class. And in New York the radical mood of the working class was daily in evidence. The traditional link of the northern working class to the Democratic Party had to be strengthened if it were to last. Wagner and his colleagues slowly impressed this upon their fellow party members, including Franklin Roosevelt.
The support for the Fair Labor Standards Act of 1937 which provided a maximum wage and a forty-hour week was more complex. The act had been opposed by the AFL as cutting into the collective bargaining process. The AFL had long believed that government-set maximum hours and minimum wage laws would set standards for industry which would accomplish less than could be achieved through collective bargaining: the maximum hour would become the minimum hour, the minimum wage the maximum wage. The new CIO industrial unions, however, supported the act; bargaining conditions for unskilled and semi-skilled workers were quite different than those prevalent in negotiating contracts for skilled crafts. The act represented the payment of political debts to the CIO and was designed to keep the CIO within the ranks of the Democratic Party.
The New Deal politically represented a national coalition which for a few years, 1936 to 1938, could claim to represent almost all classes. The agricultural and conservation programs wedded, if only temporarily, the old Populist radicalism, as represented by Senators Norris, Borah, Wheeler, LaFollette, Nye, et al., to the New Deal. The Wagner Act and the Fair Labor Standards Act joined the labor movement to the New Deal. The AAA linked the large and medium sized farmers to the Democratic Party.
The Negro vote largely swung into the ranks of the Democratic Party in the nineteen-thirties, although it is not immediately apparent why this was so. The New Deal, except in its aid to Negro education, did not have a program designed to improve the status of Negro life in the United States. The New Deal did not enter into any fight against Jim Crow in any of its forms, it did not encourage opposition to the segregationists. Then why the support? In the first place, the switch of the Negro votes into the ranks of the Democratic Party had a class rather than race basis; the Negro worker backed the New Deal for the same reasons that white workers did. Secondly, as Negroes were the first to be fired and the last hired they sought relief-monies and work-relief jobs in large numbers —despite the fact that a number of relief agencies, such as the CCC, struggled to exclude Negroes from their fair share in the program. Third, the New Deal made a conscious effort to win the Negro vote by a massive propagandistic effort. To do this, the support of the Negro middle-class leadership of educators and clergymen was required. Such Negro leaders as President Mordecai Johnson and Mary McLeod Bethune secured money for Negro education from the New Deal in exchange for their support. Mrs. Bethune became the head of the National Youth Administration’s Division of Negro Affairs which became the center for propaganda among Negroes in the New Deal.
Despite this, there was radical sentiment among Negroes. The National Negro Congress had been originally a radical-center of protest. Captured by the Communist Party in its Popular Front period, it was turned into another center of pro-New Deal sentiment. The tragic success of the Communist Party in giving a radical cover to the New Deal was nowhere more apparent or successful than in the Negro struggle.
While it is true that the New Deal made concessions to the labor movement, that was not its main drift or significance. The New Deal was certainly not the creator of a “laboristic” society in the United States. The main direction of the New Deal was toward the trustification of American society, a process further accelerated by the War Production Board and other government agencies during World War II.
Perhaps the most important progressive advance of Roosevelt and the New Deal was the successful fight for the liberalization of the Supreme Court. The Court had long been dominated by men who adhered to an older ideology designed to advance capitalist interests in a period in which the task had been that of furthering the advance of monopoly capitalism. It had to be reconstituted in order to stem its drive toward the destruction of the New Deal program, a drive which had been given its most concrete form in the Court’s decisions concerning the unconstitutionality of the NRA and the first AAA.
As a result of the most important constitutional crisis in American history since the Civil War, the Court capitulated. Roosevelt was then able to appoint a number of liberal justices to create a liberal majority on the Court. While this new court protected the New Deal program, the most important long range consequences have been in the advance of the rights of Negroes and the defense of civil liberties against Congressional attack.
WHY THE NOTION ADVANCED by most left-liberals and the labor movement that the New Deal represented a progressive, pro-labor, moderately anti-capitalist movement?
There are a number of related answers to this question, answers which touch upon the nature of intellectual life in the United States, the line of the Communist Party, the collective security foreign policy of the New Deal, the nature of the opposition to the New Deal and Franklin Roosevelt, and, above all, to the state of development of the American working-class at the time.
The great bulk of American intellectuals and professionals supported the New Deal; only a small intellectual minority could resist New Deal blandishments — it was unusual and disarming for intellectuals to be wooed by a national administration. But the New Deal’s attraction for the intellectual was not only in the political-psychological realm. After all, positions of some meaning were made available to young writers, artists, economists, social workers and teachers within the many temporary and permanent New Deal agencies. But if intellectuals no longer suffered from the same feeling of alienation, they had to pay a price for their new found comforts and sense of security. The alienated intellectual of the early thirties was all too often transformed into an unthinking New Deal enthusiast.
Added to this combination of the intellectuals-search-for-a home and the sanction for the New Deal given by the Communist Party, there was the quite real belief that the collective security foreign policy of the New Deal represented the only method of successfully struggling against the horrors of Hitlerism. Because the New Deal, at least after 1937, took the leadership in developing a foreign policy based on the idea of collective security, no matter what power realities this concept masked, large sections of the liberal and even radical public gave their support to the New Deal. And their support for the foreign policies of the New Deal led to their support of all the policies on the New Deal. It was a case of virtue by association.
But more important than the intellectuals’ drive for a home, or the policies of the Communist Party, or the appeal of Roosevelt’s foreign policy, was the development of class relations in the United States. Pitted against the New Deal were the most reactionary elements in the United States. This was true despite the fact of the New Deal program for the trustification of American society. Why?
A distinction has to be drawn between opposition to the specific policies of the New Deal and opposition to Franklin Roosevelt. The editors of the voice of stable British capital, The Economist, commented in 1936 that, though his [Franklin Roosevelt] enactments are those of very moderate Liberalism, his statements, particularly in denunciation of the rich, are often extreme. If the fluctuations of his course and the violence of his language be borne in mind, the bitterness of the opposition to him can be understood, though not shared. It is very significant that hostility to the President is many times stronger than opposition to his policies.
The Economist went on to point out the crucial fact about the election of 1936:
Under Mr. Landon, the Republicans had a policy distinguishable only in minor shades of emphasis from that of the Democrats. The Republicans in this year’s campaign paid Mr. Roosevelt the tribute of borrowing his policies while denouncing his philosophy.
Of course, it is true that not all the opponents of Franklin Roosevelt supported his policies while opposing his anti-capitalist demagogic rhetoric. In the 1936 campaign, those elements in American society still wedded to an ideology of laissez-faire capitalism, and containing that anti-Semitic, nativistic outcropping of Populism- turned-sour, supported William Lemke for the presidency on a program which was an hysterical rant against the twentieth century. And it was this that characterized the opposition to the New Deal for most liberals and progressives. The New Deal gained support by the vices of its opponents.
What is more to the point, the New Deal represented the furthest left that was available as a mass phenomenon in the United States. While one can blame, with some justification, the wholesale support of the New Deal by the labor movement on the machinations of Stalinists, social-democrats, business unionism, or just plain cowardice, that is not enough to account for the fact that the American labor movement did give its wholehearted support to the New Deal in return for what the editors of the Economist summed up as the accomplishments of the New Deal:
Relief there has been, but little more than enough to keep the population fed, clothed and warmed. Recovery there has been, but only to a point still well below the pre-depression level. Reform there has been, but it is slight in comparison with the reformers’ blueprints. The great problems of the country are still hardly touched.
The problem is really simple if one is willing to lay aside chiliastic and romantic notions based upon the experience of other countries and their working class movements. The American working class had not yet reached a level of consciousness that enabled it to do anything but accept the concessions it was able to force out of the pro-capitalist parties. The task in the New Deal period for the labor movement was the mass organization of the industrial workers. Prior to the nineteen-thirties the American working class had been divided and at a lower level of development than European workers. One could not reasonably expect the American working class to leap so far ahead as to reject a New Deal, with its undeniable benefits, in the interests of a more class conscious and politically mature radical objective.
Thus, the New Deal: a program for trustification of American capitalism, brought into being by reformers with an anti-capitalist rhetoric and with the support of the working class. One is reminded of the aphorism of that great defender of capitalism, Joseph Schumpeter, who bitterly complained, “Without protection by some nonbourgeois group, the bourgeoisie is politically helpless and unable not only to lead its nation but even to take care of its particular class interest.” These tasks were left to the son of the old landed gentry, Franklin Roosevelt, in alliance with many anti-Big Business elements and with the working class. Only those who expect history to move in some single linear direction should be surprised by this paradox.
1. See David Noble, The New Republic and the Idea of Progress, 1914–1920 in the Mississippi Valley Historical Review, pp. 395–6, December 1951.
Last updated on 11 January 2020