The View From 1776

A New Deal Frame of Mind

With our radical left-wing Congress setting forth on a mission to preserve and enlarge the welfare-state, it’s appropriate to review the arrogant destructiveness of their New Deal predecessors who created the welfare-state.

A root of New Deal failure to restore prosperity in the 1930s was its authors’ ignorance of business and finance, overlain with simplistic arrogance.  The same may be said of today’s San Francisco and East Coast liberal-socialists.

The New Dealers were a brash, cock-sure bunch who came from the academic world to Washington intending to wipe out as much of our capitalistic system as possible.  They viewed the business and financial communities as a cross between Neanderthal ignorance and evil perversity.  They assumed that all right-thinking people were united in the view that businessmen and bankers existed to oppress “the people.”

While 1950s apologists like liberal historian Arthur Schlesinger, Jr., prettied the recollections of the New Deal by describing it as “saving business from itself,” the facts show clearly that the New Dealers were rabid anti-capitalistic socialists.

Describing the literally revolutionary frame of mind of FDR and his “brains trust,” the author of The New Dealers, published in 1934, wrote:

Roosevelt had the benefit of several other great national experiments as useful points of reference for the American New Deal.  He had before him the spectacle of the Soviet Union with its recent dramatization of economic reorganization through the Five-Year Plan.  He had before him the example of Fascist Italy with its regimentation of business, labor and banking in the “Corporative State.”  He had before him the instances of Kemal [Ataturk in Turkey], Mussolini and Hitler in restoring national pride and self-confidence to beaten or dispirited peoples.

A key word in the foregoing, which illuminates the entirety of liberalism, is experiments.  Liberal-socialism-progressivism is all about ivory-tower theory aimed at constructing sand castles in mid-air, without the benefit of a foundation in real life.

Robert Higgs, in Depression, War, and Cold War (2006), writes:

Accepting his party’s nomination for the presidency in 1936, Mr. Roosevelt railed against the “economic royalists” who were allegedly seeking a “new industrial dictatorship”..... Privately, he opined that “businessmen as a class were stupid, that newspapers were just as bad”.... Just before the election of 1936, in an address at Madison Square Garden, he fulminated against the magnates of “organized money…”  ....To uprorious applause, he threatened: “I should like to have it said of my second Administration that in it these forces met their master.”

Illustrating further the New Deal frame of mind was Mr. Stuart Chase?s 1932 book, A New Deal, from which Franklin Roosevelt’s campaign strategists took the name for his campaign theme and the new administration itself. 

Mr. Chase said regarding the Depression, ?the cycle is a direct product of that specialization which appeared with the industrial revolution.  It is a product of laissez-faire, and the neglect to inquire what an economic system is for?There never has been control from the top, and that is the only point from which the cycle may be steadied.?I suspect it is the end of the economic system as we have known it ? and suffered with it ? in the past?a new deal is in order.

What remedies did Mr. Stuart Chase propose?  The drive of collectivism leads toward control from the top. ? At bottom the conception of economic planning is science supervising a people?s housekeeping. ? And so the final idea of a National Planning Board emerges; ?a group which knows the past, can give capable advice as to the present, and sees into the future, especially the technological future. ?The real work, the real thought, the real action must come from the technicians: that class most able, most clear-headed of all in American life, hitherto only half utilized in technical detail and in college class rooms. ?This is a long-swing project we are starting, longer than the secular trend; longer than the industrial revolution itself.  Errors will be made; methods will be tried out and discarded; but the principle of control from the top must go on. 

After taking office in 1933, Mr. Roosevelt followed this advice closely, both in the words of his speeches, which echoed Mr. Chase?s ideas, and in the creation of his “brain trust” of university policy advisors and in the creation of the National Recovery Administration (NRA).  At the outset of the New Deal there were only a handful of Federal agencies.  By 1936 there were more than five hundred Federal agencies that had offices in every state in the union.

It is also instructive to note the New Deal thesis about the relationship of the individual to the state, as described by Mr. Chase: The state is the embodiment of the whole community, and its rule of action, in theory at least, ?the public interest.?  If your corporation is busily dynamiting the public interest, the state has the right to close you up. ?To tell an American that he cannot invest his money in this project, or even to suggest that it is thrown away in that, is a bold and unheard-of step to the left; ?

But how else can the obsolescence rate be steadied, excess capacity and overproduction kept within bounds of market requirements, thoroughly vicious and wasteful enterprises be checked, the non-speculative investor be protected? ?

One of the most interesting tasks of the Planning Board will be an attempt to draw the line between those economic areas where competition is still useful and those where it has outlived its usefulness, and either is already supplanted or should be supplanted by some form of collectivism. ?

The balancing and regulating of man hours will, like minimum wages, operate to weed out parasitic enterprises, establishments so inefficient that they can make their margin only by driving workers through a ten or twelve hour day. ?This is the program of the third road. 

It is not an attempt to bolster up capitalism, it is frankly aimed at the destruction of capitalism, specifically in its most evil sense of ruthless expansion.  The redistribution of national income, the sequestration of excess profits, the control of new investments, are all designed to that end. ?And woe to Supreme Courts, antiquated rights of property, checks and balances and democratic dogmas which stand in its path.

Compare this to Benito Mussolini?s statement in The Political and Social Doctrine of Fascism (1933):

Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived of in their relation to the State. ?The Fascist State has drawn into itself even the economic activities of the nation, and, through the corporative social and educational institutions created by it, its influence reaches every aspect of the national life and includes, framed in their respective organizations, all the political, economic and spiritual forces of the nation.

This is a concise statement of liberals’ unquenchable thirst to regiment every aspect of your daily life, from smoking, to eating, to the automobiles you drive, the words you use, and the religious views you may express.

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