THE COMING OF THE NEW DEAL

The Depression did not produce a single pattern of international public response. For nearly the entire decade of the 1930s, conservative governments ruled Britain and France.

They were more interested in preserving public order than relieving suffering or embarking on policy innovations. In Germany, Adolf Hitler, leader of the Nazi Party, established one of the most brutal dictatorships in human history. Hitler banned all political opposition and launched a reign of terror against Jews and others deemed to be “un-German” In the Soviet Union, another tyrant, Joseph Stalin, embarked on successive five-year plans that at great social cost produced rapid industrialization and claimed to have eliminated unemployment. The militarist government of Japan invaded China in 1937, and hoped to extend its rule throughout Asia.

Roosevelt conceived of the New Deal as an alternative to socialism on the left, Nazism on the right, and the inaction of upholders of unregulated capitalism. He hoped to reconcile democracy, individual liberty, and economic planning. “You have made yourself,” the British economist John Maynard Keynes wrote to FDR, “the trustee for those in every country who seek to mend the evils of our condition by reasoned experiment within the framework of the existing social system.” If Roosevelt failed, Keynes added, the only remaining choices would be “orthodoxy” (that is, doing nothing) or “revolution.”

Roosevelt did not enter office with a blueprint for dealing with the Depression. At first, he relied heavily for advice on a group of intellectuals and social workers who took up key positions in his administration. They included Secretary of Labor Frances Perkins, a veteran of Huh House and the New York Consumers’ League who had been among the eyewitnesses to the Triangle fire of 1911; Harry Hopkins, who had headed emergency relief efforts during Roosevelt’s term as governor of New York; Secretary of the Interior Harold Ickes, a veteran of Theodore Roosevelt’s Progressive campaign of 1912; and Louis Brandeis, who had advised Woodrow Wilson during the 1912 campaign and now offered political advice to FDR while serving on the Supreme Court.

The presence of these individuals reflected how Roosevelt drew on the reform traditions of the Progressive era. But Progressivism, as noted in Chapter 18, was hardly a unified movement, and Roosevelt’s advisers did not speak with one voice. Brandeis believed that large corporations not only wielded excessive power but had contributed to the Depression by keeping prices artificially high and failing to increase workers’ purchasing power. They should be broken up, he insisted, not regulated. But the “brains trust”—a group of academics that included a number of Columbia University professors—saw bigness as inevitable in a modern economy. The competitive marketplace, they argued, was a thing of the past, and large firms needed to be managed and directed by the government, not dismantled. Their view prevailed during what came to be called the First New Deal.

A celebrated cover of The New Yorker depicts a morose Herbert Hoover and a jaunty Franklin D. Roosevelt riding to Roosevelt’s inauguration in March 1933.

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