Gale Encyclopedia of U.S. Economic History, Vol. 2.
Gale Virtual Reference Library.
Ed. Thomas Carson and Mary Bonk.
NEW DEAL: REFORM OR REVOLUTION (ISSUE)
In 1933 the New Deal was initiated after the inauguration of Franklin Delano Roosevelt (1882–1945) as
President of the United States. The New Deal represented a set of extensive legislative programs intended
to alleviate human suffering that resulted from the Great Depression. In 1929 the Depression had brought
about a collapse of the national economy.
Historians have drawn various conclusions about the legacy of the New Deal and its effect on the U.S.
economy and society. At the time, critics of the New Deal came from both the political right and left.
Conservatives attacked Roosevelt's programs as "socialist" reforms. They argued that he had intervened
too deeply in the affairs of business and the economy. Groups such as the American Liberty League, led by
the Du Pont family, publicly opposed the "dictatorial" course of the New Deal. By 1935 many New Dealers
had given up trying to reconcile their agenda with business interests. Feeling forced by growing
Conservative opposition to Roosevelt's liberal programs, New Dealers advocated programs of a more
strident, anti-corporate nature. As part of the "Second New Deal" in 1935, for example, the administration
proposed to increase taxes on the wealthy, whose income tax could reach as high as 75 percent under this
scheme. It was the highest rate ever proposed in U.S. history and was branded a "soak the rich" plan by
conservatives, although in practice very few Americans were rich enough to be placed in the highest
income bracket.
The liberal policies of the New Deal were for the most part supported by socialists, communists and other
radicals. At times, however, critics on the left claimed that New Dealers had not gone far enough in
redistributing economic and political power to marginalized groups which included the labor movement,
farmers, women, and minorities. The Social Security Act (SSA) was one of the most important pieces of
social welfare legislation in U.S. history. Congress passed it in 1935. The act provided federal assistance
for the destitute elderly, set up an unemployment insurance system, aided the handicapped and
dependent children, and started a pension system. It was a pension system, however, that excluded
domestic servants and agricultural workers from coverage. Since both categories contained a large
number of African Americans and women, many needy people were denied security in their old age.
Despite the contemporary criticism from the right and left, the widespread popularity of President
Roosevelt's policies was evidenced by his landslide presidential victory in 1936 and his reelection in 1940
and again in 1944. He held his office for four terms, longer than any other president in U.S. history.
After World War II (1939–1945) liberal historical interpretations of New Deal policies dominated.
Historian Arthur M. Schlesinger argued in the The Age of Roosevelt (1957) that the New Deal created a
reformed capitalism. He maintained that the power of businesses had finally been constrained by the
regulation of public interests. Other liberal historians such as Carl Degler in Out of Our Past (1959) took
the argument a step further. Degler claimed that in addition to American Revolution (1775–1783) and the
American Civil War (1861–1865), the Roosevelt administration brought on a "Third American
Revolution."
Other historians were more critical. In The Age of Reform (1955) Richard Hofstadter found a break with
the past in the New Deal programs. Hofstadter was critical of the New Deal for lacking an overall
philosophy in shifting from policies favoring the Progressive reform of the corporate world to a New
Deal liberalism with a "social democratic tinge that had never before been present in U.S. reform
movements."
William Leuchtenburg was the first historian to provide a systematic, sympathetic critique of the period in
Franklin D. Roosevelt and the New Deal (1963). He called the New Deal only a "halfway revolution."
Leuchtenburg argued that New Deal reforms were limited because of the ideological and political
opposition faced by the Roosevelt administration. According to Leuchtenburg little more could have been
achieved given the realities of the time. Ellis Hawley, meanwhile, challenged the liberal assumption that
the New Dealers worked against corporate interests. He further argued in The New Deal and the Problem
of Monopoly (1966) that New Deal programs in many cases were meant to promote private business
interests.
In the 1960s historians of the New Left were much more critical. Ronald Radosh argued that the New
Deal helped enhance the power of capitalism. Radical historians such as Colin Gordon in New
Deals (1994) also provided evidence that there were close associations between New Dealers,
industrialists, and financiers.
But by the 1970s and 1980s most historians agreed with the interpretation that the New Deal was
historically significant and positive in its reforms. Nevertheless they ceded the New Deal was severely
limited by the political and ideological realities of the time. Later research was concerned less with the
"conservative" or "revolutionary" nature of the Roosevelt administration's policies. Contemporary
scholars such as Theda Skocpol, James T. Patterson, Barry Karl, Mark Leff, and others focused more on
the ideological and political limits with which the New Dealers had to contend. Allen Brinkley in The End
of Reform (1995) provides an analysis of the New Deal that explores these ideological constraints.
The New Deal, he emphasizes, underwent a transition from a government that promoted regulation to one
that, for the most part, wished to stay out of the affairs of the business world.
Debate about the efficacy and impact of the New Deal still continued at the end of the twentieth century,
almost 80 years later. Conservatives continued to criticize the Roosevelt administration programs for
controlling the economy too extensively. Liberal and radical historians, conversely, maintained the
reforms were beneficial to society in spite of the constraints that the New Dealers confronted. Although
historians somewhat disagreed about the radical implications of the New Deal programs, they came to two
similar conclusions. The first was that the New Deal legislation raised federal spending and regulation to
the highest levels in U.S. history. The second was that New Deal reforms of the national economy and
society operated within the confines of the political and ideological realities of the capitalist system.
See also: Harry Lloyd Hopkins , Hoovervilles , National Labor Relations Act , National
Recovery Act, Franklin D. Roosevelt , Social Security Act , Works Progress Administration
FURTHER READING
Badger, Anthony J. The New Deal: The Depression Years, 1933–1940. New York: The Noonday Press,
1989.
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Brinkley, Alan. The End of Reform: New Deal Liberalism in Recession and War. New York: Vintage
Books, 1995.
Burns, James MacGregor. Roosevelt: The Lion and the Fox. New York: Harcourt, Brace and World, Inc.,
1956.
Fraser, Steven, and Gary Gerstle. The Rise and Fall of the New Deal Order, 1930–1980. Princeton, NJ:
Princeton University Press, 1989.
Leuchtenburg, William E. Franklin D. Roosevelt and the New Deal. New York: Harper and Row, 1963.