This will sound eerily familiar to the political rhetoric of Republicans today...
The Conservative Critics of the New Deal and FDR’s Fireside Chat: A Discussion on the Rhetoric of Political Economy
It has been several months since I have talked with you concerning the
problems of Government. Since January, those of us in whom you have vested
responsibility have been engaged in the fulfillment of plans and policies which
had been widely discussed in previous months. It seemed to us our duty not only
to make the right path clear, but also to tread that path.
- Franklin D. Roosevelt, Fireside Chat, June 28, 1934
Franklin Delano
Roosevelt began to implement his New Deal policies in 1933 and conservative critics,
such as Herbert Hoover, were quick to declare that the New Deal policies were
the “most stupendous invasion of the whole spirit of liberty that the nation
has witnessed since the days of Colonial America.”[1] Appealing
to the American fear of socialism and totalitarianism, critics like journalist David
Lawrence asserted that the New Deal “more strongly resembles the dictatorship
of the Fascistic and Communistic states of Europe than it does the American
system.”[2] Ogden
Mills, former Secretary of the Treasury under Hoover, warned, “Our economic
system cannot be half free and half socialistic…. There is no middle ground
between governing and being governed, between absolute sovereignty and liberty,
between tyranny and freedom.”[3] FDR
addresses these “prophets of calamity” in a fireside chat on June 28, 1934:
If I were to listen to the arguments of some prophets
of calamity who are talking these days, I should hesitate to make these
alterations… But I have no such fears. (Roosevelt 1934)
What is remarkable is that, at this time of fear of economic depression, Communism, Fascism, and liberty, Roosevelt lead the American people to “look to the larger future” which seeks to re-establish “forgotten ideals and values”[4] which recognize that in “a land of vast resources no one should be permitted to starve.” More importantly, Roosevelt connected the need to provide “social insurance” to the “vicissitudes of modern life” which have been caused “due to a lack of understanding of the elementary principles of justice and fairness by those in whom leadership in business and finance was placed.” Roosevelt is commenting on the changing nature of capitalism in which “neglected conditions” of the rise of industrialization and the decline in living standards of the people “had to be corrected.”[5]
Relief was and continues to be our first consideration. It calls for
large expenditures and will continue in modified form to do so for a long time
to come. We may as well recognize that fact. It comes from the paralysis that
arose as the after-effect of that unfortunate decade characterized by a mad
chase for unearned riches, and an unwillingness of leaders in almost every walk
of life to look beyond their own schemes and speculations. (Roosevelt 1934)
Recognizing
the negative bi-products of capitalist development and the negative
manifestations of socialism and communism, Roosevelt assumed the duty to ”not
only to make the right path clear, but also to tread that path.” FDR rejected
his detractor’s assumption that nothing was possible between capitalism and
socialism and treaded the path for a third way, a perspective on economic
policy that could exist between socialism and capitalism. Roosevelt created a
system of capitalism that sought to protect its citizens against the dangers of
inherit in the system. To better understand the significance of New Deal debate
we must first understand the historical significance of the conflation between
capitalism and its governments. In understanding this we are better prepared to
understand why the conservative critics viewed the child labor laws, fair
wages, and shortened working hours were not just attack on business but an
attack on individual liberty.
The
two sides argued the protection of individual rights but FDR argued for the
rights of the individuals of society while his critics argued that individual
rights were the rights of business. The foundation of this debate the question
about how the government should best respond to the complex social, economic,
and political dynamics in a new era of industrial capitalism. To understand the
relationship between business, government, and the people it is best to look at
how this conversation emerged through the beginning stages of capitalism. Most
important is to understand how the growth of capitalism is so intertwined with
a strong central government and how that the myth of capitalism and individual
liberty become reduced to a myth of business owners who operate outside of any
political boundaries.
Karl
Marx, in 1848, prophetically wrote in The
Communist Manifesto:
"The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, and make connections everywhere."
What Marx was
getting at is an inherent quality in the nature of capitalism, which demands
constant growth for its survival. Constant growth requires more products, being
purchased by more people, while being produced for less. The need for growth is
what pushes down wages and working conditions but also drives producers to
advertise to induce spending and establish new markets in other nations. Starting
at this fundamental characteristic nature of capitalism helps to better
understand why the business leaders of the early 1930s passionately denounced FDR
and the New Deal. The implementation of higher standards and higher wages meant
a decrease in profits and therefore the imminent decline of capitalist society.
Theoretically they were correct, but they were mistaken on placing the blame on
Roosevelt and the interference of government in the affairs of business because
their claims ignored an inherent quality of capitalism – that capitalism
requires the involvement of its government to grow and thus for capitalism to
survive. So in order for capitalism to survive it must grow; but for it to grow
it must increase profits; to increase profits it must pay less or sell more; to
pay less is to create the social conditions of inequality; to sell more is to
open new markets abroad; to open new markets abroad requires the power of the
state. What FDR’s critics were really arguing was not for government to stay
out of the affairs of business; rather they only wanted government intervention
when it would increase profits for themselves. Roosevelt addressed the dynamic
of greed in capitalism and indicted his detractors for causing the depression that
forced the government to intervene:
Relief was and continues to be our first consideration. It calls for
large expenditures and will continue in modified form to do so for a long time
to come. We may as well recognize that fact. It comes from the paralysis that
arose as the after-effect of that unfortunate decade characterized by a mad
chase for unearned riches, and an
unwillingness of leaders in almost every walk of life to look beyond their own
schemes and speculations. (Roosevelt 1934)
Detractors were correct, from a
pure capitalist economic perspective, that the FDR’s threat of a long-term
system of relief and large government expenditures[6]
threatened the core of capitalist expansion and American society as a whole.
Hannah Arrendt explains how stagnation, in a capitalist society, moves from the
economic to the political and affects the whole society because products are
“shared by, many different people who were organized in widely different
political bodies.”[7]
The interdependency of government and business in capitalism does mean that
stagnation in business leads to stagnation in the rest of society. Historian
Arthur Schlesinger tells how the critics of the New Deal saw the protection of
business interests as the protection of all Americans interests:
They were
fighting, it seemed, for much more than their own interests; or, at least, the
interests of business were the interests of all. As Hoover suggested,
“Corporations are not a thing apart from the people, for they are owned by
somewhere between six and ten million families.” The issue created by the war
on business, Hoover said, was “orderly individual liberty and responsible
constitutional government as opposed to un-American regimentation and
bureaucratic domination. (Schlesinger 1958, 479)
The civilization envisioned by critics like J.P. Morgan, was bound up in the idea that capitalism was natural in humanity and therefore what is best for business is best for all. Morgan described the type of civilization that was in danger of destruction - that civilization was characterized by “all those who can afford to hire a maid.”[8] Morgan and Roosevelt’s vision of civilization differed. Roosevelt viewed American civilization as one “dominated by the humane ideals of democracy,” is that “in a land of vast resources no one should be permitted to starve.” For Roosevelt, it was the duty of government to protect its citizens against the negative consequences of government and even though his critics insisted that government interference inhibited the ability for business to operate according to pure capitalist principles, they ignored the fact that, in order for capitalism to expand and thus survive, individuals must be exploited and the government must act on behalf of business to establish markets abroad. Capitalism demands government intervention for its growth and survival, therefore capitalist economics is political as well as personal. The government, business, and the people cannot be separated and this is why FDR sought to find a third way in between capitalism and socialism.
The
debate between Roosevelt and his conservative critics reflects less an argument
about government intervention and more about the struggle for America to adapt
to the changing dynamics of culture within capitalism. Following the great depression government,
business, and citizens were struggling to understand how the most powerful
economy in the world could become crippled so easily. Roosevelt and the New
Dealers pointed to the greed and unregulated era of speculation in the economy
and exploitation of the labor force and Roosevelt’s opponents pointed to
government intervention in the free market that was crippling the ability of
capitalist to grow business and the economy as a whole. In a way both parties
were correct. The conservative critic’s misunderstanding of the interdependency
government and business within capitalism is the back drop from which we can
make sense of the powerful language and heated rhetoric employed in the fight
against the New Deal. Opponents attacked New Dealers by labeling them fascists
and communists[9],
power hungry bureaucrats[10], and
by attacking the “Brain Trust” academic advisors[11].
These labels are better seen as rhetorical tools used to protect the system of
capitalism. Hoover, Mills, Warburg, Lawrence, and others were worried that, in
a world where there was no middle ground between capitalism and socialism, the
New Deal policies would inhibit economic growth and destroy the American
society, as they knew it. According to their belief, they were correct but
mistaken. Rhetorically they advocated for government to remove itself
completely from the affairs of business but they were not aware or did not care
to admit that capitalism required the intervention of the government in order
to create favorable conditions for constant growth. Roosevelt rejected the
notion that political economy was black or white. His New Deal policies
innovated in a way to maintain the capitalist system by instilling in it
socialistic principles. Roosevelt treaded the path to a third way, a sort of
welfare capitalism that sought to protect capitalism and the American people
from the social dangers inherent in capitalism. Roosevelt contends that his New
Deal policies sought “the primary good of the greater number,” and that a small
portion of society was having their toes stepped on but that minority of
Americans sought to “gain position or riches or both by some short cut which is
harmful to the greater good.”[12]
Possibly the most convincing argument, directed towards the American people and
not the leaders of industry, was a set of direct questions that Roosevelt asked
the citizens if the New Deal had improved their situation. I conclude this
paper with Roosevelt’s conversation with the American people:
But the simplest way for each of you to judge recovery lies in the plain
facts of your own individual situation. Are you better off than you were last
year? Are your debts less burdensome? Is your bank account more secure? Are
your working conditions better? Is your faith in your own individual future
more firmly grounded?
Also, let me put to you another simple question: Have you as an
individual paid too high a price for these gains? Plausible selfseekers and
theoretical diehards will tell you of the loss of individual liberty. Answer
this question also out of the facts of your own life. Have you lost any of your
rights or liberty or constitutional freedom of action and choice? Turn to the
Bill of Rights of the Constitution, which I have solemnly sworn to maintain and
under which your freedom rests secure. Read each provision of that Bill of
Rights and ask yourself whether you personally have suffered the impairment of
a single jot of these great assurances. I have no question in my mind as to
what your answer will be. The record is written in the experiences of your own
personal lives.
In other words, it is not the overwhelming majority of the farmers or manufacturers
or workers who deny the substantial gains of the past year. The most vociferous
of the Doubting Thomases may be divided roughly into two groups: First, those
who seek special political privilege and, second, those who seek special
financial privilege. About a year ago I used as an illustration the 90 percent
of the cotton manufacturers of the United States who wanted to do the right
thing by their employees and by the public but were prevented from doing so by
the 10 percent who undercut them by unfair practices and un-American standards.
It is well for us to remember that humanity is a long way from being perfect
and that a selfish minority in every walk of life—farming, business, finance
and even Government service itself—will always continue to think of themselves
first and their fellow beings second (Roosevelt 1934)
Works Cited
Arrendt,
Hannah. 2009 [1958]. The Origins of
Totalitarianism. Benediction Classics.
Roosevelt,
Franklin D.: "Fireside Chat.", June 28, 1934. Online by Gerhard Peters
and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14703.
Schlesinger,
Arthur M. Jr. 1986 [1958]. The Coming of
the new Deal, 1933-1955. New York: Houghton Mifflin Company.
[1]
Herbert Hoover quoted in Schlesinger 1958, 473
[2]
David Lawrence quoted in Schlesinger 1958, 473
[3]
Ogden Mills quoted in Schlesinger 1958, 479
[4]
I have pointed out to the Congress that we are seeking to find the way once
more to well-known, long-established but to some degree forgotten ideals and
values. We seek the security of the men, women and children of the Nation.
(Roosevelt 1934) www.presidency.ucsb.eduhttp://www.presidency.ucsb.edu/ws/index.php?pid=14703#ixzz1rrumhyk3
[6]
Relief was and continues to be our first consideration. It calls for large expenditures
and will continue in modified form to do so for a long time to come. (Roosevelt
1934)
[7]
Arrendt 1958, 125, 126
[8]
“Businessmen, in short, were fighting for civilization itself. ‘If you destroy
the leisure class,’ J. P. Morgan told a senate committee, ‘ you destroy
civilization.’ (When reporters asked him to identify the leisure class, he
replied, ‘All those who can afford to hire a maid.’)” (Schlesinger 1958, 479)
[9]
Ogden Mills “an all-powerful central
government to which all men must look for security, guidance and assistance,
and which, in turn, undertakes to control and direct the lives and destinies of
all.” (Schlesinger 1958, 473)
Herbert Hoover “Most stupendous invasion of the whole
spirit of liberty that the nation has witnessed since the days of Colonial
America.” (Schlesinger 1958, 473) David
Lawrence – “This Maelstrom of centralized order-giving… more strongly
resembles the dictatorship of the Fascistic and Communistic states of Europe
than it does the American system.” (Schlesinger 1958, 473)
[10]
Herbert Hoover “the human animal…
has two forms of greed – the greed for money and the greed for power. The lust
for power is infinitely the worse.” (Schlesinger 1958, 474) “In all
bureaucracies there are three impeccable spirits – self-perpetuation,
expansion, and an incessant demand for more power.” 474) “this host of
government agents spread out over the land, limiting men’s honest activities,
conferring largess and benefits, directing, interfering, disseminating
propaganda, spying on, threatening the people and prosecuting for a new host of
crimes.” (Schlesinger 1958, 474) Nation’s
Business – the best public servant is the worst one: “the better he is and
the longer he stays, the greater the danger. If he’s an enthusiast – a
bright-eyed madman who is frantic to make this the finest government in the
world – the black plague is a house pet in comparison.” (Schlesinger 1958, 474)
[11]
Frank Kent – “third rate college
professors and unsuccessful welfare workers” allied with a group of political
bosses and an amiable but reckless President. (Schlesinger 1958, 473) Eugene Meyer – The nation’s “most
immediate danger, lay in ‘the inexperience of the young intellectuals who are
apparently directing the policy of the administration.’” (Schlesinger 1958, 473)
George Peek – “The major policies of
agriculture and foreign trade are in
charge of men who have never earned their livings in industry, commerce, finance,
or farming.” (Schlesinger 1958, 473) Saturday
Evening Post – If they are a class competent to plan and run the business
of the country, then practical experience and training in industry have lost
their meaning.” (Schlesinger 1958, 473) “it is our country not a laboratory for
a small group of professors to try out experiments that bid fair to result in
an expansion and a stink.” (Schlesinger 1958, 474) Nation’s Review – “The differences between the man of thought and
the man of action seem fundamental an irreconcilable.” (Schlesinger 1958, 473) Bruce Barton – an advertising guy –
“The day will come when compared to the word professor, the word banker will be
a term of endearment.” (Schlesinger 1958, 474)
[12]
In the working out of a great national program which seeks the primary good of
the greater number, it is true that the toes of some people are being stepped
on and are going to be stepped on. But these toes belong to the comparative few
who seek to retain or to gain position or riches or both by some short cut
which is harmful to the greater good. (Roosevelt 1934)
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