The Evolution of
Modern Liberalism
Chapter # 6
**Evaluating the evolution of modern liberalism
Chapter # 6 Vocabulary
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Consumerism
Income disparity
Inflation
Monopoly
Social programs
Trickle-down economics
Welfare state
Modern American liberalism is a form of liberalism
that arose from progressive ideals such as
Theodore Roosevelt's New Nationalism, and
Franklin D. Roosevelt's New Deal.
Modern American liberalism is a combination of
social liberalism, social progressivism, support for
a welfare state and a mixed economy. Keynesian
economics play an influential role in the
philosophy.
It is often associated with the Democratic Party.
Liberals support freedom of speech and freedom of
religion as well as government entitlements such as
health care and education.
:the central premise that individual freedom can only
exist where it is protected by a strong democratically
elected government that has an active role in society
and the economy. ( summarize this slide)
Homestead Strike
The failure of the strike was the
beginning of a long decline for the
steelworkers union.
Carnegie steel plants would employ
only non-union workers for the next 40
years.
skip
Read p. 196-97
Economics and the Principles of
Liberalism in North America skip
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Taking an Economic Practice Opinion Poll
Rm 6.1
Question 1-20
Survey 4 other students and identify the three
questions with most agreement and the three
questions where you opposed almost
unanimously.
Read p.198-99
skip
The Jungle is a 1906 novel written by author and socialist
journalist Upton Sinclair. Sinclair wrote this novel to
highlight the plight of the working class and to remove from
obscurity the corruption of the American meatpacking
industry during the early 20th century. The novel depicts in
harsh tones the poverty, absence of social programs,
unpleasant living and working conditions, and hopelessness
prevalent among the working class, which is contrasted with
the deeply rooted corruption on the part of those in power.
The sad state of turn-of-the-century labor is placed front and
center for the American public to see, suggesting that
something needed to be changed to get rid of American
"wage slavery".
The Progressive Era (Series:
America in the 20th Century)
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http://www.learnalberta.ca/content/aeve/movi
eLauncher.html?movie=smil/progressive_era
_cc.mov
Roosevelt’s Progressivism
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Gave the public a “square deal”
Preventing large companies from abusing
their control over the marketplace.
Why was Standard Oil on Roosevelt's hit list?
Notes on Taft and the Sherman Anti-Trust Act
Notes on Alphonse Desjardins and Credit
Unions
How did these reforms help Americans?
Reforms
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Limited to some extent the classical liberal
freedoms and principles of the marketplace.
Reforms prevented powerful entities from
abusing the rights and freedoms of less
influential organizations and individuals.
Credit Unions: profit-sharing operation went
against classical liberal principles.
Evolution of modern liberalism
Roaring Twenties
Roaring Twenties is a phrase used to describe the
1920s, principally in North America, that emphasizes
the period's social, artistic, and cultural dynamism.
Everyone would have a chance at attaining prosperity
The Wall Street Crash of 1929 served to punctuate the
end of the era, as The Great Depression set in.
Radio
Prohibition
Talkies
TV
Women get the vote
Political cartoon of 1919 depicting a
"European anarchist" attempting to
destroy the Statue of Liberty.
Represents Liberal Democracy
The term "Red Scare" has
been retroactively applied to
two distinct periods of strong
anti-Communism in United
States history: first from
1917 to 1920, and second
from the late 1940s through
the late 1950s. These periods
were characterized by
heightened suspicion of
Communists and other
radicals, and the fear of
widespread infiltration of
Communists in U.S.
government.
The first Red Scare
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150,000 anarchists or communists in USA in
1920
Seattle docks were idled by a strike race riots,
police strike in major American cities
contributed to the perception that support for
Socialism and communism in America was
growing.
Produced an atmosphere of political
conservatism. (ultimately lead to a resistance
to change.)
Harding and Coolidge p.202-03
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What was Harding’s platform of a “return to
normalcy”?
How were the tax reductions and subsidies by
Coolidge a reflection of classical liberalism?
How do the developments of economic
prosperity, mass production, mass marketing
and consumerism reflect the values of
classical liberalism?
Tax reductions and reduced subsidies
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Lessens the level of government intervention
Strengthens the role of the market.
Economic prosperity and Consumerism
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Henry Ford and mass production ( produce large
volumes of a product)
Practiced Welfare capitalism : minimum wage and a
40 hour work week.
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Better wages would encourage them to buy more goods
and services
Consumerism increased during the 1920’s
Radio ,film, telephones and refrigeration encouraged
consumerism.
The Stock Market Crash of 1929
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P.206-07
Notes
Define Bank runs
Social Effects of the Depression
Notes 207-08
The 1930’s and the Great Depression
The Election of 1932
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Americans blamed President Hoover for the
country’s economic woes.
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Franklin Delano Roosevelt won the Democratic
Party’s nomination.
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Roosevelt promised relief for the poor and more
public works programs to provide jobs. He attacked
Hoover and the Republicans for their response to
the Great Depression.
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Long-lasting influence on liberal democratic
governments. ( government intervention)
II. plans for
I. Relief for
economic
the unemployed
Recovery
The New Deal had three major goals:
Evolution of modern liberalism
III. Reforms to
prevent another
depression
Franklin Roosevelt as President
Banking
Crisis
• Temporarily closed
all the nation’s
banks to stop panic
and large-scale
withdrawals
Hundred Days
• Roosevelt
pushed
Congress to put
most of his
New Deal into
practice.
• The New Deal
promised relief,
recovery and
reforms.
Trouble for the New Deal
Radical Reactions to the New Deal
• Believed the New Deal did not go far enough in
reforming the economy
• Wanted a complete overhaul of capitalism
Conservative Reactions to the New Deal
• Attacked the New Deal as a radical break with
traditional American ideals
RM. 6.2
High light a document
Economic Downturn of 1937
The Nation’s Economy
• Roosevelt had hoped to cut back on government
spending, for he feared the growing federal
budget deficit.
• As unemployment rose during 1937 and 1938, the
government spent large sums of money to help
the unemployed.
Economic Theory
• British economist John Maynard Keynes
argued that deficit spending was needed
during a depression.
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Write a paragraph in a word document
In what ways did Roosevelt’s New Deal reject
or reflect the principles of Liberalism?
The Dark Years 1929-1939 in
Canada
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http://www.learnalberta.ca/content/aeve/movi
eLauncher.html?movie=smil/dark_episode_1
_ana_cc.mov
Government Responses to the
Depression in Canada
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Prime Minister Bennett
Relief camps
Believed that laissez-faire policies would lead
the country out of the crisis
Created the Bank of Canada: took control of
the money supply.
Bennett's New Deal
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Bennett's "New Deal" promised a more progressive
taxation system, a maximum work week, a minimum
wage, closer regulation of working conditions,
unemployment insurance, health and accident
insurance, a revised old-age pension and agricultural
support programs.
Nevertheless, Bennett lost the October 1935 general
election. ( evolution of modern liberalism)
Prime Minister Mackenzie King
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Created many social programs ( modern
welfare state )
Unemployed built airports Established TransCanada airlines
National Harbours board
Created the CBC
Crown Corporations And Social
Programs
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Bank of Canada
National film board
Unemployment Insurance
Family allowance
National Housing Act ( low income housing)
** the evolution of modern liberalism
The Ebb and Flow of Economic Liberalism
Since the Second World war
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Canada: strengthened social programs
Public health Care
Old Age Pension
Foreign Investment Review agency
CRTC: An independent agency responsible
for regulating broadcasting and
telecommunications systems in Canada
Economic Crisis of the 1970’s
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USA wanted their currency to “float”; not be
tied to the gold standard
Other countries followed suit, and a period of
inflation followed.
Classical Liberalism: currencies would trade
freely in an open market.
Yom Kippur War 1973
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1973 Arab-Israeli War and the Fourth Arab-Israeli War
between Israel and a coalition of Arab states backing Egypt
and Syria.
Egypt and Syria respectively crossed the cease-fire lines in
the Sinai and the Golan Heights, which had been captured
and occupied by Israel since the 1967 Six-Day War.
Opec:( organization of petroleum exporting countries)
imposed a 5 month embargo on the USA who has always
back the state of Israel.
Opec: reduced production causing an increase in price and
added to the inflation as a recession occurred as countries
that cut back in economic production.
Stagflation: a recession and high inflation as the same time.
Yom Kippur War 1973
Stagflation
Cost of social programs go up as the
recession causes more
unemployment.
Governments are collecting less
taxes from big business and the
average citizens
Monetarism: Friedman and Hayek
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Try to undo the interventionist policies of
previous governments (Klein and Stephen
Harper)
One monetarist policy conclusion is the
rejection of fiscal policy in favor of a
“monetary rule.” ( interest rates)
http://www.youtube.com/watch?v=Q277sXW0Z2k&feature=related
Moore schooled by Friedman over economics http://www.youtube.com/watch?v=cD0dmRJ0oWg&feature=related
http://independence4wales.com/2012/milton-friedman-the-road-to-serfdom (very
good)
Supply Side Economics
Supply-side emphasizes the importance of
tax cuts and business incentives in
encouraging economic growth, in the
belief that businesses and individuals will
use their tax savings to create new
businesses which in turn will increase
productivity, employment.
Reaganomics
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Tax cuts primarily for corporations and
the wealthy
government spending cuts on social
services
deregulation of the economy
Thatcherism: wide scale privatization
emphasis on individual and self-help
(classical Liberalism)
reduced the power of the labour unions (
unions are seen as a threat to the free
market system)
http://www.youtube.com/watch?v=z5CCRI1vdwE&feature=related
Reaganomics
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Reagan’s plan for tax and spending cuts
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Two goals
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Reduce taxes to stimulate economic growth
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Cut the federal budget
Based on supply-side economics
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A theory that says breaks for businesses will
increase supply of goods and services, aiding the
economy
Thatcherism
http://www.youtube.com/watch?v=40NVkfbaMo4
Pause and Reflect p. 224
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In what way does this example represent a
middle ground between laissez-faire
economics and social justice?
Democratic Socialism
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It is characterized by central
planning, nationalization and a
comprehensive social welfare
programs. ( universality )
Legislative reforms
Sweden is the modern “ Social
Welfare State”.
Public vs Private Industries
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Public Ownership
25% of the forest
industry
50% of the hydro
85% of the iron ore
95% of the
railroads
The telephone
systems
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Private Ownership
90% of workers
work in private
firms
Large multinationals
exist such as Volvo,
Saab.
P.226 Life is a Smorgasbord
http://www.ifitweremyhome.com/compare/US/SE
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Sweden
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United States
P. 228 Comparative Scale
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Draw figure 6-16 into your notes
Review points
Economic Liberalism and the Global Economy
Today
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There is the recognition that governments do indeed
have a role to play in furthering the principles of
modern liberalism ( domestically as well as
internationally)
We have begun to question the unregulated free
market
Bailout of industries and the regulation of banks in
the USA.
The ebb and flow of liberalism seems to flowing
towards the left ( greater role of government.)
Welfare Capitalism
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Combination of traditional free market
principles mixed with laws or practices of a
welfare state
Provides a safety net for individuals living &
working in society.
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Min. wage, working day, employment insurance
Rationale
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traditional liberal economic theory would suggest
workers are at a sever disadvantage compared to
companies
Welfare State
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Completely provides for the welfare or
wellbeing of its citizens (physical, social)
Greater economic equality (minimum
standard of living)
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Education healthcare, employment insurance,
price and wage controls, public transportation,
child care,
Some paid by taxes other insurance programs
(temporary or permanent)
Heavily taxed middle class and upper-class
Difficulties
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Creating an efficient system
Rationing of goods and services (dependence)
Lack of motivation
Resentment by those who work and have to
pay heavy taxes to support those who do not
work.
Fiscal Policy
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Government’s use of taxing and spending to
regulate and influence the economy.
Governments use of spending and taxes to
influence growth or decline the business
cycle.
Weak economy deficit spending
Strong economy raise taxes
Keynesian policies
Monetary Policies
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Government regulation of the supply of money to
influence the economy.
When the economy is slowing down interest rates
are lowered to stimulate borrowing and improve the
economy (increasing the amount of money available)
When the economy is strong / growing (inflation)
interest rates are increased to reduce borrowing and
slow down economic growth.
Milton Friedman supporter of monetarism.
Interesting article on Reganomics
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http://distributism.blogspot.com/2007/07/myt
h-of-reaganomics.html