Regarded by historian Carl Degler as a “revolution” in which “The American people…abandoned, once and for all, the doctrine of laissez faire”^[1], the extent to which the New Deal constituted a change, rather than an attempt to protect America’s pre-1929 values from the pressures of the Depression has long been a source of historical controversy.

Considering Roosevelt’s popularity and its unprecedented ambition there appears to be a strong consensus amongst historians, and the body of evidence, that in political terms, the New Deal did indeed represent a “revolution” of the kind Degler describes. However, the New Deal’s impact on the social and economic life of the nation is less clear. Critics such as Bernstein, pointing to the business-friendly aspects of the NRA and Roosevelt’s timid attitude to spending have concluded, “The New Deal [programmes] did not transform the American system; they conserved and protected American corporate capitalism”^[2], contending that for all the New Deal’s political impact, it was ultimately conservative in its motives and constituted a missed opportunity for structural change to the American economy.

However, Bernstein seems to ignore the fact that neither the New Deal nor the vast majority of Americans ever sought such changes. Anthony Badger recognizes this, and instead concludes that, political successes and economic shortcomings aside, the New Deal unwittingly acted as a “holding operation for American society”[3], staving off radicals such as Huey Long and Francis Townsend and preventing further collapse until the Second World War brought more fundamental change. Even this, however, appears to sell the New Deal far short, ignoring the lasting effect of the reforms and programmes of the New Deal era, which, as Leuchtenburg acknowledges, transformed the country to enough of an extent that when prosperity resumed, it would be on a far more sustainable manner than before.

Despite this, Badger’s reference to the New Deal as a ‘holding operation’, when economic factors alone are considered, appears justified. In 1939, the outbreak of war in Europe, 1 in 5 Americans were still reliant on relief and unemployment still stood at 9.9% compared to 24.9% in 1933. In 1937, the year in which the New Deal effectively ended, unemployment stood at 14.3%, down to just 4.7% in 1942.[4] This considered, it is hard to dispute that Roosevelt’s inauguration goal in 1933 that, “Our greatest primary task is to put people to work”[5] lay largely unfulfilled. The rise in unemployment figures in 1937 demonstrates that the New Deal’s effect on unemployment was temporary and reliant upon government spending to sustain it.

The real transformation in America’s employment levels it seems, came in the years between September 1939 and 1941 when it fell by almost 12% thanks increased demand for American armaments from Europe, and later through direct involvement in the war. The temporary nature of the gains in employment secured by the New Deal, contrasted with the lasting employment following the war therefore substantiates Badger’s claims of the New Deal being a ‘holding operation’, with the war having the real transforming effect.

However, it seems questionable whether, if the New Deal had indeed been little more than a “holding operation”, the Second World War would have presented the opportunities it did or even whether, without it, America would have been in the position to have mobilized for war in the first place. Set aside from the results of Roosevelt’s programmes to restore employment and ease hardship, the New Deal was genuinely transforming in less tangible ways. The psychological impact of the collapse in 1929 should not be underestimated, with the resultant crisis of confidence in the financial structures of the country constituting not just an obstacle to recovery but also threatening further collapse.

Exacerbating this was Hoover’s dogged commitment to non-intervention, viewed as paralysis and was the antithesis of the confidence-rebuilding measures which were crucial for Americans to begin using the banks, issuing credit and purchasing goods again. Converse to Hoover’s claims that “Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves”[6], the success of the New Deal in reversing crisis clearly constituted a transformation both in how Americans viewed their government’s role, but also in the change of mindset from which this stemmed.

This regeneration of confidence is perhaps the clearest example of the New Deal’s transforming power. Roosevelt’s programmes brought about a transformation in the outlook of Americans, restoring a sense of national pride and economic confidence which in 1933 had lain in tatters. In contrast to Badger’s conclusion that the New Deal’s transformation being limited and transitory, Leuchtenburg recognizes that “in declaring that there was no fear but fear….Roosevelt….made his greatest single contribution to the politics of the 1930s: the instillation of hope and courage in the people”^[7] This appears justified in light of the half a million Americans who wrote to Roosevelt within his first week in office and in the unparalleled electoral success he enjoyed throughout the 1930s.

The “very totality”^[8] of grandiose gestures such as closing the banks and the flurry of legislation emanating from congress transformed the national mood. The recovery from the psychological traumas of collapse which this permitted constituted the first major step towards recovery. Neither the hollow rhetoric and claims in 1930 that, “I am convinced we have now passed through the worst”^[9], nor the war, which Americans would initially regard with trepidation and reluctance was capable of doing this, leaving it to be considered among the New Deal’s most transforming consequences.

In concrete terms, too, it is difficult to view the initiatives of the 100 days as a predominately conservative ‘holding operation’. Roosevelt’s regulation of financial institutions demonstrates reforming ambition and a commitment not simply to re-starting the superficiality of 1920s bubble, built on speculation and unreliable credit, but to sustained, long-term reform of the economy. The 1933 Banking Act represented a willingness to go further than ever before, reforming the Federal Reserve Board, insuring banks and addressing the weaknesses underlying the pre-1929 system. The success of these measures is clear; Leuchtenburg notes that “fewer banks (sic) suspended during the rest of the decade than even in the best single year of the twenties”[10]

While it seems clear from the outcomes the 100 days and the US government’s subsequent survival that these aims were met, this does not, of course, negate Badger’s claims to the New Deal being primarily a transitory, conservative phenomenon which preserved, rather than transformed the existing system. The faces behind these reforms were far from new, certainly, with Arthur Ballentine, Hoover’s Undersecretary of the Treasury remaining in his post and the Banking Act being drafted by bankers who could hardly be described as a change of face from the pre-1929 order.

Indeed, Time Magazine, looking back in 1935 on the one year anniversary of the SEC which had been set up by the Act, observed that its chairman, Joseph Kennedy was, “no New Dealer… He was a Wall Street financier and a skilful practitioner of much that the New Deal deplored. During the 1920’s he had been in the thick of cinematic mergers, deals and syndicates”^[11] Leuchtenburg even goes so far as to claim that “The emergency banking bill represented Roosevelt’s stamp of approval for decisions made by Hoover’s financial advisors”^[12].

In light of this, it seems that despite of Degler’s lyricism about the New Deal representing the rejection of laissez faire capitalism, the Banking Act was hardly the work of new faces or a fundamental break with the past. Rather, it was the work of the old, pre 1929 order preserving itself and interests. Far from seeking to transform the structures of American capitalism, the NRA and Banking Acts shored them up. Badger comments that “The consequences of banking and securities reform were conservative precisely because Roosevelt wanted to restore conservative investment practices”^[13], and it certainly appears that Roosevelt’s aim, despite his rhetoric about the “money changers” being “driven out”^[14], was no more than the preservation of American capitalism, albeit on more sustainable terms.

At the same time, Badger’s conclusion that the result of this amounted to some kind of life support system seems somewhat insufficient. The Banking Act, NRA and other initiatives of the ‘first’ New Deal did not fundamentally change the underlying assumptions of the American economy, but they did not simply preserve it either. Whilst Roosevelt mirrored the content of many of Hoover’s policies, he took them further than his predecessor had dared, representing a genuine transformation in the government’s willingness to involve itself in the economy, as well as in the framework within which it operated, to a significant extent.

However, in asserting that the Roosevelt’s efforts did not come close to matching the Second World War’s economic transformation of the economy, Badger has a valid point. Noting that “he failed to embrace early enough a compensatory fiscal policy”^[15], it does appear that Roosevelt’s conservative fiscal attitudes were the most significant constraint on the extent to which the New Deal was able to transform economically.

Keeping with the economic consensus of the time, Roosevelt, despite the government spending increase which the New Deal represented, remained wedded to the idea of a balanced budget. Whilst the willingness of Germany and Scandinavia particularly to embrace Keynesian ideas of stimulating demand through government deficit spending ensured that these countries were among the first to escape the global depression, Roosevelt refused to make such a commitment.

Leuchtenburg points out that “Roosevelt trusted in common sense…total commitment was required, and total commitment he would not give…The Keynesian formula for…creating huge deficits year after year seemed to defy common sense”^[16]. In this respect, Roosevelt’s much-vaunted pragmatism must be seen as a conservative constraint on the New Deal. Indeed, upon meeting Roosevelt, Keynes wrote in an open letter that “In the past orthodox finance has regarded a war as the only legitimate excuse for creating employment by governmental expenditure. You, Mr President, having cast off such fetters, are free to engage in the interests of peace and prosperity the technique which hitherto has only been allowed to serve the purposes of war and destruction.”^[17]

In fact, it was not until The Second World War came that Roosevelt felt able to heed Keynes’ advice, with government debt rising from 40% of national GDP in 1941 to 125% in 1945, compared to no significant increase over the New Deal Years^[18]. As a result, it is difficult to see Roosevelt’s attitudes to spending amounting to the revolution claimed; instead pointing to a sense of conservativism which limited the New Deal’s transforming economic impact.

‘The Roosevelt recession’ in 1937 which resulted from his efforts at fiscal conservatism exposes the transience of the progress made, and their continuing dependence upon government expenditure. This suggests, in support of Badger’s ‘holding operation’ conclusion, that whilst the content of New Deal programmes had not (as Roosevelt had believed) erased the spectre of depression, the expenditure they represented (which Roosevelt had sought to reduce) was not large enough to generate permanent recovery either. The result was a temporary mechanism which whilst having neither the spending power to ‘prime the pump’ nor the coherence for the programmes themselves to resolve the economic difficulties, left the economy in a state of ‘limbo’ , preventing further collapse whilst doing little to bring transformation; a “holding operation”[19] of the kind Badger describes.

It was at a social level that the New Deal and its programmes brought the greatest transformation of American Society. Whilst perhaps in and of themselves inadequate to stimulate recovery, they did play a major role in clearing the rubble of economic collapse and preparing the ground for future recovery in a more long-lasting and stable manner than the preceding boom. Leuchtenburg notes that “when recovery did come, it was much more soundly based because of the New Deal project”^[20].

In just 8 years, Works Progress Administration built 651,087 miles of highways, roads and streets; and constructed, repaired, or improved 124,031 bridges, 125,110 public buildings, 8,192 parks, and 853 airport landing fields^[21]. Simultaneously, the Civilian Conservation Corps undertook projects such as the tree-planting ‘shelterbelt’ which safeguarded against the kind of dust-storms and drought which had so plagued farmers even through the years of prosperity in the 1920s. In tandem with programmes such as the TVA and rural electrification, this constituted nothing less than a transformation of America’s public infrastructure, which, for all the boom of the 1920s had been neglected, and leaving it in a far better state for wartime mobilization and recovery.

While critics point out that neither the WPA or the CCC enjoyed the scale of funding necessary to kick start recovery in the same way that the war eventually did, the presence of these public works was hardly disadvantageous. A modern infrastructure of roads, the electrification of rural areas and the combating of soil loss all doubtlessly contributed to the United States’ ability to mobilize itself on the outbreak of war in 1941. Similarly, whilst the immediate economic impact of Icke’s agency was perhaps, as suggested, negligible, the capacity of post-war prosperity to perpetuate itself for several generations was in no small part thanks to the social infrastructure bequeathed to the country by the New Deal.

Even the Civilian Conservation Corps, whose lack of capital-intensive projects and focus on providing temporary employment Badger laments as a wasted opportunity had its uses. According to C.P Hill, “the Civilian Conservation Corps made its workers fit and alert and gave them technical skill, leaving them greatly in demand from employers”.^[22] If this is the case, then even temporary projects such as the Civilian Conservation Corps which might have otherwise been seen as part of Badger’s “holding operation”[23] had clear transforming effects in providing a generation with the skills, work ethic and energy upon which both the war could be fought and post-war growth, built

Economic and social achievements aside, there is little doubt that the New Deal between 1933 and 1941 transformed America’s political landscape forever. Roosevelt’s unprecedented four victories with among the largest mandates in American history leave little to be desired in terms of successes, and such popularity should be seen as evidence of the New Deal’s transformation of the American political system. Badger himself notes that “The lasting loyalty of lower-income voters to Roosevelt expressed their appreciation of the very real and essential benefits they received”, bringing into focus the permanent political impact of Roosevelt.

The ‘New Deal coalition’ radically expanded the Democrat’s traditional base beyond ‘wets’ and immigrant groups and southern whites, to include labour unions other minority groups such Jews and the Irish. Even blacks, ardent loyalists to the Republican ‘party of Lincoln’ deserted the party en masse. Black historian Nancy J. Weiss notes that “…the New Deal changed the voting habits of black Americans in ways that have lasted to our own time.”[24] The continuation of this trend as recently as 2004 and the continued loyalty of many of these groups to the Democrats therefore clearly demonstrate the New Deal’s lasting success in transforming the American political landscape for the rest of the 20^th century and beyond.

Roosevelt’s presidency also represented a permanent transformation in the relationship between the individual and the state. Under the New Deal, many were brought into direct contact with the previously distant federal government for the first time as it became directly involved through the provision of unemployment insurance and projects such as the Rural Electrification Administration and the Civilian Conservation Corps. By personalising this relationship to such an extent in the eye of the American citizen, the New Deal, along with FDR’s own amiable persona and his ‘fireside chats’ contributed to a new form of ‘personality politics’ with the president viewed as an instigator of change, rather than merely a safe pair of hands. Although the desirability of these developments is, in itself, a matter of political controversy even today, it nonetheless seems likely that without Roosevelt’s precedent many post-war reforms, driven by presidential mandate against a less supportive Congress would not have been possible.

This legacy, combined with Roosevelt’s appointment of Supreme Court judges throughout his presidency ensured that New Dealers dominated American politics for at least a generation. The New Deal therefore transformed the political agenda of the country far beyond the limits of its own programmes, setting the precedent for further socially-focused and civil rights legislation well into the 1960s, to a large extent compensating for the New Deal’s conservative constraints in these areas.

Consequently, there can be little doubt that the New Deal was indeed a transforming force which left a lasting impact on American society and making it a fundamentally different place in 1941 than it had been in 1933. At the same time, critics such as Bernstein are right to conclude that the New Deal had clear limitations. It was not the “revolution”[25] which Degler lauds; neither did it constitute a “rejection of laissez faire capitalism”[26] as he claims. The reluctance of Roosevelt to take the leap of embracing Keynesian economics which both Leuchtenberg and Badger note, his willingness to adopt and continue many of the techniques and ideas of his predecessors, as well as the New Deal’s shortcomings in areas of wealth redistribution and in bringing economic recovery itself all show that the New Deal could act both as a constraint, as well as an advocate of economic and social transformation in 1930s America.

However Badger’s conclusion that such, largely self-imposed, pragmatism confined the New Deal’s role to that of a transitory ‘holding operation’ is flawed. The long term political consequences of the New Deal and the precedents it set, as well as it’s reforms to the infrastructure and financial systems ensured that whilst to a large extent the impact of the New Deal was not fully felt in 1941, it had nonetheless transformed the political, social and economic structures of the country far beyond where they had been in 1929, laying the precedent for subsequent change and prosperity both in the war years, and beyond.

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^[1] Carl N. Degler “The Third American Revolution.” (1959) in Out of Our Past: The Forces that Shaped Modern America. p. 234^[2] Barton Bernstein “The Conservative Achievements of Liberal Reform” (1963) in Towards a New Past p. 295[3] Badger, Anthony 1989. The New Deal: The Depression Years 1933-1940 p. 311[4] Gene Smiley “Recent Unemployment Rate Estimates for the 1920s and 1930s,” (1983) Journal of Economic History, p.487-93[5] Franklin D. Roosevelt Inaugural Address (1933) quoted in Samuel Rosenman ed., The Public Papers of Franklin D. Roosevelt, Volume Two: The Year of Crisis, 1933 p.11–16.[6] Herbert Hoover (1930) State of the Union. Time Magazine

^[7] William Leuchtenberg Franklin D. Roosevelt and the New Deal, 1932-1940 (1963) p. 42

^[8] ibid. Leuchtenberg p. 42

^[9] ibid. Hoover State of the Union

[10] ibid. Leuchtenberg p. 60

^[11] unatrib. (1936) ‘Reform and Realism’ Time Magazine

(Time Magazine Online http://www.time.com/time/magazine/article/0,9171,754995,00.html)

^[12] ibid. Leuchtenburg p. 43

^[13] ibid. Badger p. 308

^[14] ibid. Samuel Rosenman

^[15] ibid. Badger p.303

^[16] ibid. Leuchtenberg pg 42

^[17] John Maynard Keynes An Open Letter to President Roosevelt The New York Times December 16, 1933 quoted in New Deal Network (1998) (http://newdeal.feri.org/nation/na34302.htm)

^[18] US Department of the Treasury, Bureau of the Public Debt Historical Debt Outstanding (2007)

(http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo3.htm)

^[19] Ibid, Badger

^[20] Ibid. Leuchtenburg. p. 347

^[21] Jeffrey B. Morris and Richard B. Morris eds., Encyclopedia of American History, 7th Ed (1996) p.457

^[22] C.P. Hill, Franklin Roosevelt and the New Deal, (1975) p.56[23] ibid, Badger p. 311

[24] Nancy Weiss, Farewell to the Party of Lincoln: Black Politics in the Age of FDR. (1983)

[25] ibid, Degler

[26] ibid, Bernstein

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