Looking back on the real New Deal

I picked up a 1984 book, The Great Depression: America, 1929-1941 by Robert S. McIlvaine, at the Bookends used book store in hope that the history of the Great Depression might throw light on the current Great Recession.

The most significant result of the Great Depression, according to Robert S. McIlvaine, was a change from the historic American individualism to communitarianism.  The New Deal was a response to this change and not a cause of it, he wrote.

Americans historically have regarded themselves as individually responsible for their own destinies, and economic misfortune as their own fault.  But during the Great Depression, the vast majority of the people were in trouble, including individuals highly respected by their neighbors.  If everybody suffers the same fate, people cease to regard themselves as personally at fault, and they look for collective action rather than individual enterprise.

Herbert Hoover represented the old American individualism at its best, McIlvaine wrote.  A person of intelligence and integrity, Hoover could not bring himself to respond to what the American public demanded, because he thought such a response would threaten basic American values.  He came to be hated as few if any American Presidents have been, before or since.  Franklin D. Roosevelt, a less admirable individual but a brilliant politician, understood public opinion and responded to it.

McIlvaine wrote that the initial Roosevelt policy was not a populist program, but rather an attempt to forge a business-government partnership, much as President Obama has tried to do. But when corporate business leaders turned against Roosevelt, and the American people turned against big business, Roosevelt lost nothing by saying, “I welcome their hatred”.  It was to Roosevelt’s benefit, McIlvaine wrote, that conservatives depicted his program as more radical than it was.  Most Americans today disapprove of the Wall Street bailouts, but we have nothing like the anti-business sentiment that existed back then.

Roosevelt had sympathy for the underdog, shaped by his personal struggle with polio and the important influence of his wife Eleanor.  But the main reason for the New Deal was the need to respond to popular discontent.

McIlvaine said historians have classified pro-FDR radicals, such as the Progressive Party in Wisconsin, the Farmer-Labor Party in Minnesota, Upton Sinclair’s End Poverty in California movement and the CIO (Committee for Industrial Organization, later Congress of Industrial Organizations) as left-wing and liberal, and anti-FDR radicals, such as Huey Long of Louisiana, the political radio priest Father Coughlin, and Dr. Francis Townsend, author of the Townsend pension plan, as right-wing and fascistic.  Historians ignore the Communists, who were more influential in the labor movement than liberals like to remember. But all these movements were in fact more alike than they were different.  They all reflected popular discontent with the status quo, the rich and the corporate elite.  This discontent, however, fell short of support of socialism.  The majority of Americans wanted to correct abuses of the capitalist system, not overturn it.

The New Deal era accomplished far-reaching reforms—Social Security, unemployment insurance, the Securities and Exchange Commission, the Tennessee Valley Authority and other big hydroelectric projects, legislation recognizing labor’s right to organize and bargain collectively—until the Republican-Southern Democratic alliance crystallized after 1938, after which further change was blocked.  Over the next 30 or 40 years, the Republican Party absorbed its conservative Southern Democratic allies, and became more internally consistent and more disciplined.  President Obama faced the equivalent of FDR’s post-1938 opposition from the day he took office.

The most interesting chapters were about popular culture and public attitudes.  In the movies, rich people were often criticized not for being rich, but for being out of touch with American life.  An heiress would become involved with a penniless newspaper reporter, or a playboy with a chorus girl, and learn the true meaning of life.  Gangster movies were often implied criticisms of society.  Movie gangsters were depicted as victims of society or as examples of ruthless amoral greed.  But there was rarely if ever any questioning of the capitalist system itself.

McIlvaine thought the changes in attitudes brought about by the Great Depression were more significant than the actual reforms of the New Deal.  He saw the Ronald Reagan administration as an attempt to restore pre-1929 individualism and mistakenly thought this attempt had run its course in 1984.  Instead the Reagan administration was the beginning of a reversal of attitudes which has continued to this day, and which the Obama administration accepts as political reality.

The lesson of McIlvaine’s book for the present day is that if you want progressive change, it is not enough to pin your hopes on a charismatic leader.   During the 1930s, the labor union movement was a strong force that did not did depend for its strength on either of the two political parties.  There were third-party movements with the potential to draw votes away from the two major parties, and progressive reformers within both political parties.  Progressive change is not handed down from above.  It has to be demanded from below.

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