Wednesday, December 05, 2012

Lind on the Roots of the New Deal

One thing conservatives know about the Franklin D. Roosevelt is that he pinched the idea for the New Deal from the fascist Mussolini (snark).   If they care to nuance that idea, they might want to take a look at Michael Lind's informal, readable and instructive Land of Promise: An Economic History of the United States.  No secret that Lind embraces a kind of Hamiltonian vision of good government.  No surprise that he is fascinated by the numerous episodes in our history of assertive central-government economic policy.  One of which would be the National Industrial Recovery Act (NIRA, later NRA), the centerpiece of Roosevelt's first term.  In general, Lind gives the NRA better grades than it gets from so many historians these days.  And on sources, Lind is unequivocal:
[T]he actual origins of the NIRA lay in the Wilson administration, not the Mussolini regime. The NIRA revived the WIB [War Industries Board--ed.] of World War I under a new name. The trade associations that were supposed to write industry-wide codes under government supervision were a version of the commodity sections and war-service committees of the WIB. The denial of the Blue Eagle emblem to uncooperative firms was merely a revival of the technique of shaming companies into compliance that had been used by the WIB during World War I. Hugh Johnson   was the former deputy of Bernard Baruch at the WIB.
And not just the WIB.  Lind identifies a source even closer to the Depression and the New Deal--Herbert Hoover, Roosevelt's predecessor in the White House, but the bearer of a luminous record in the field of activist public policy, including sponsorship of a "collaborative" approach to industrial management.  Lind quotes the economist Henry Simon: "The N.R.A. ... is merely Mr. Hoover’s trust policy and wage policy writ large."  And New Dealer Rexford Guy Tugwell: "We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.” 

If there is a second thing conservatives know about Roosevelt's NRA it is that it was a failure.  Here they share common ground with a lot of other observers.  Lind isn't so sure.  He argues that much of the NRA wound up assimilated into other law under other names. But he does offer a more delicate spin on the whole project, drawing on a contemporaneous criticism uttered by John Maynard Keynes.  Keynes suggested that the NRA was a good idea by way of long-term reform, not so good for curing the immediate problem at hand (Keynes would have preferred more aggressive public spending, an agenda that Roosevelt seems always to have found distasteful).  Lind concludes, "in hindsight, Keynes was right that the NIRA was a measure of long-term reform that distracted the energy and attention of the Roosevelt administration and Congress from more urgent recovery measures.

Sources:; Michael Lind (2012-04-17). Land of Promise: An Economic History of the United States Harper. Kindle Edition. 

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