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When the bottom dropped out of the Stock Market in October, 1929, the United States capitalist class felt a paralyzing shock. The working class and farmers lost confidence in the hitherto unquestioned leadership of the business community, but, more strikingly, the business men themselves suddenly became anxious to take political and economic direction from someone, somewhere, who somehow could save their system. In 1932 many of them turned to Franklin D. Roosevelt, governor of New York and Democratic candidate for President. His campaign promises were vague and contradictory; he promised a “New Deal” but criticized the Hoover administration for extravagant spending; he said one thing in the East and the opposite in the West. But he breathed confidence and hope, energy and warmth. A large proportion of the capitalist class decided that, since Hoover had failed to end the crisis, Roosevelt might be the savior they so anxiously sought. Workers and farmers felt the same way in large enough numbers to elect him, and FDR took office on March 4, 1933.
When he took the oath of office on that cold March day, 14,000,-000 workers were jobless. The local and state relief agencies on which Hoover had relied to prevent mass starvation were running out of money. As young people began taking to the road, older people in frightening numbers could be found rummaging in garbage cans for food scraps, and farmers were making it dangerous for officials to attempt foreclosures. It was this desperation on the part of workers and farmers that panicked the business community. Hoover, despite the popular image of him, had not sat immobile in Washington while the country went to the dogs. His administration had taken vigorous steps to save the capitalist structure, most notable of which was the establishment of the Reconstruction Finance Corporation the job of which was to lend money to banks, railroads, and financial institutions. In addition, Hoover had induced Congress to pass the Agricultural Marketing Act to stabilize farm prices. A number of other laws also aimed at shoring up the capitalist structure. At the same time Hoover believed that direct federally-financed relief to individuals would be degrading and morally corrosive. He bent his efforts toward helping business firms but did little to quiet the growing anger of the suffering people. Here lies the key difference between Hoover and Roosevelt, between conservatives and liberals. They shared a common concern for the future of capitalism; they differed on what the government must do to insure that future. Their biggest bone of contention was the size of the concessions that the bourgeoisie, acting through the government, must make to the workers and farmers. That is why workers and small farmers found themselves in the 1930’s voting for the same administration that parts of the middle class, many big farmers, and a sector of the big bourgeoisie supported.
By 1936 the New Deal had passed the most spectacular series of new laws the country had ever seen. These included certain measures that bore a disquieting resemblance to corporate-state laws then in effect in fascist Italy, but they also included social-welfare legislation that enabled many people to denounce the New Deal as a socialist conspiracy. In reality the laws that enacted unemployment insurance, old-age insurance, and other reforms were extremely moderate. Imperial Germany under Bismarck had passed such laws in the 1880’s to head off socialist agitation. France had enacted similar measures starting in the 1890’s for the same reason. Great Britain had a long history of social-welfare legislation going back a hundred years. In the 1930’s the New Deal was merely catching up in a hurry with the reform legislation of other highly-developed capitalist countries—and for the same reason: the need to head off radical discontent. In this the liberal administration succeeded magnificently.
The key law of the early New Deal was the National Industrial Recovery Act (NIRA) which set up the National Recovery Administration (NRA). Under this act the businessmen in each industry could confer, without fear of antitrust prosecution, to draw up “codes” of fair business practices; the government would then enforce these codes as law. The codes established minimum wages, minimum prices in order to reverse the deflationary trend, and production quotas to insure fair competition. The law also contained a clause (Section 7a) which guaranteed labor’s right to organize. Within a year it had become clear that the codes were being written by and for the largest corporations in each industry, which used the NRA to engage in monopolistic practices. Their minimum prices had ruined small businessmen. Their production quotas had prevented any changes in the relative sizes of the firms in each field. Most important, Section 7a had proved the seed from which company unions had grown up all over the nation. Although it had guaranteed workers’ the right to choose their representatives, it had imposed no obligations on bosses to recognize those representatives. Moreover, the NRA administrators had issued an order on February 4, 1934, that the representatives elected by the majority of workers in a plant could speak only for that majority; the minority and even individuals could bargain separately and negotiate their own contracts. Thus a boss could easily destroy a union by temporarily granting advantageous terms to company-union or non-union workers.
Section 7a had originally been inserted into the NIRA in order to insure the defeat of a bill introduced by Senator Hugo Black, with AFL endorsement, to limit working hours to thirty per week. After the antilabor results of the NRA had become apparent, and strikes increased in frequency and bitterness, Congress bypassed the administration, and despite President Roosevelt’s disapproval, passed the Wagner-Connery bill in the spring of 1935. Two weeks later the Supreme Court invalidated the NIRA, and Roosevelt, faced with the alternative of vetoing a pro-labor bill passed by his own supporters in Congress, reversed himself and came out for the Wagner bill as the replacement for Section 7a. The bill, which became the National Labor Relations Act, virtually outlawed company unions and rectified other evils in the earlier law. In this episode, FDR showed himself to be far behind several pro-labor Democrats in Congress. Seeing workers as suffering individuals rather than as a class with specific interests of its own, and having been raised to feel the patrician’s sympathy for the poor and downtrodden, he could never understand why a company union dominated by a benevolent employer should not be acceptable to the workers in a factory. The workers hailed the Wagner Act and the subsequent reform legislation as the work of a friendly administration rather than as the responses of the government to their own discontent. Although the depression did not end until the United States began to arm for war, the majority of workers strongly believed that their interests could be adequately served within the framework of the capitalist system. They remained discontented but directionless, rebellious but not revolutionary. The Socialist and Communist Parties gained members in those years, but their votes fell sharply between the presidential elections of 1932 and 1936.
The extraordinary flexibility of American political institutions, the enormous natural wealth of the country, and the entire history of the United States – all combined to make American protest far milder than parallel movements in France, England, or Germany in the 1930’s and to explain why American workers accepted legislated reforms that European bourgeoisies had been forced to concede more than a generation before. To reflect sadly that the New Deal fooled the working class into believing that its aspirations could be realized under capitalism is to ignore a central fact. This was not deception. Most workers did not harbor revolutionary aspirations; they did not make demands the fulfillment of which obviously required a change in the system. Moderate as the New Deal reforms were, they won the allegiance of American workers so securely that even today a large number of them and their children are willing to fight an impossible war against socialism. In this way the New Deal helped to make the American working class susceptible to cold-war propaganda.
One of the issues on which the New Deal differed from the Hoover administration was the relation between the domestic crisis and the depression in European capitalist countries. Hoover blamed the depression at home on foreign causes. The New Deal, on the other hand, put domestic reform first as the way to deal with the crisis. As in the so-called “isolationist” 1920’s there was no principled difference between “internationalists” and “isolationists”; rather, different capitalists and capitalist politicians held different notions of how to serve the interests of the American bourgeoisie. During the 1930’s the government took various steps to increase its ability to maneuver freely in response to the domestic needs of the American capitalist class, sometimes at the expense of European capitalists whose systems were in far greater danger of collapse. The crisis was much too severe at home for the New Deal to feel greatly concerned with helping sister capitalist regimes to survive, especially since the Soviet Union did not seem to present an immediate threat.
European and American big business hoped that the fascist countries and the Soviet Union, like the gingham dog and the calico cat, would eventually eat each other up. In that way, the bourgeois democracies could feel safe from both threats and calmly anticipate the time when they themselves could move into the vacuum created by the reciprocal destruction of fascism and socialism. Thus, the New Deal remained “neutral” as Franco destroyed the Spanish Republic, and in so doing strengthened Italy’s dominance in the Mediterranean. FDR turned down Czech President Benes’ request that he influence Britain and France to help Czechoslovakia. Instead, Roosevelt sent an appeal to all nations, aggressors and intended victims alike, asking for peace. He added, however, that the government of the United States had no political involvements in Europe and would assume no obligations in the conduct of the proposed negotiations. He asked Hitler and Mussolini to refrain from aggression, while assuring them they would be free to commit aggression without fear of American intervention. On September 28, 1938, upon learning that Neville Chamberlain had accepted an invitation to meet Hitler and Mussolini, FDR instructed the American ambassador to transmit a two-word message to the Prime Minister: “Good man.” Two days later the Munich Pact was signed.
The peculiar structure of American politics would have worked against an unequivocal anti-fascist policy on the part of the administration even if Roosevelt’s own thinking had been prophetic. National political parties in this country are coalitions of incompatible groups held together by one bond: the need to get elected. Many of the New Deal’s supporters in the mid-West were of German descent who until the last moment gave Hitler the benefit of every doubt. There were also urban Italians proud of Mussolini’s success in putting Italy on the map. On the other hand, Jews who from the first pogrom were anti-Nazi held the balance of voting power in a number of cities on which FDR relied for Democratic success. The Catholic hierarchy in the U.S. largely supported Franco and Mussolini. Counteracting the influence of those who came to be called “premature anti-fascists” were many people who believed American intervention in World War I had resulted from the greed of American munitions-makers, and who assumed that the present crisis in Europe was as distant from their true interests as the crisis of 1914-1918 had been. All these elements in the New Deal coalition had to be conciliated if Roosevelt was to reelected in 1940, and the President’s job in keeping their allegiance was complicated by the increasing opposition to the New Deal of large sections of big business.
As war came closer in Europe, and as the Asian colonies of England and France and the Asian markets of the United States seemed more and more menaced by expanding Japan, New Deal domestic reform gave way to war mobilization. In order to win a working majority for an ever more anti-German foreign policy, Roosevelt had to cultivate closer relations with Southern reactionaries who opposed domestic reform but who had historically been “internationalists.” Roosevelt’s alliance with reform-minded Republican progressives in the mid-West, an alliance which had been necessary to the passage of certain New Deal laws, came to an end, for these liberals opposed an aggressive foreign policy.
In 1939 production began rapidly to rise and unemployment to fall as the American economy started to convert to war preparations. This process helped in another way to end the liberal reform spirit of the New Deal. The administration turned from liberal to conservative sectors of the population for needed support, and as economic hardship lessened, so did the bourgeoisie’s need to legislate reforms in order to head off workers’ and farmers’ discontent. A new feeling of class-collaborationism spread among organized workers, as the administration, which only a few years before had helped them, now asked for their help in fighting a common enemy. Not in vain had the New Deal persuaded the American working class that bourgeois democracy worked in their interest; labor leaders even imposed a no-strike pledge on their members for the duration of the war. The Left and the Communist Party supported this pledge, which was given shortly after Pearl Harbor. Businessmen did not match it with a pledge to maintain the same level of profits. The government presented business with attractive incentives in order to place the profit motive at the service of the war effort. The patriotism of the workers was evidently more reliable than that of the capitalists, who continued their prewar cartel arrangements with German firms.
The plans of the prewar capitalists of course went awry. Not only did fascism and socialism not eat each other up, leaving a vacuum for European and American capitalists to fill, but the destruction of fascism had left socialism immeasurably stronger than before. The task of destroying it now fell directly to the bourgeois democracies rather than to the fascist monster they had helped create for that purpose. Thus, Truman’s cold war was essentially not a reversal of the New Deal, as many on the Left believe. Certainly it was different from the New Deal, for the times and tasks were different. Its basic aim of preserving capitalism was the same. Domestic reform played little part in the Truman and Eisenhower administration. A relatively high standard of living played the role that reform had played under the New Deal: it tied the working class to capitalism. The Marshall Plan, Point Four, and NATO were essentially continuations of Lend-Lease and the Grand Alliance under which American industry had underwritten the capitalist regimes in Europe and then, after the war, had helped to defend them against their own workers.
The history of the New Deal and the last fifteen years has been written many times. There are fashions in historiography as there are in furniture; in the recent past American historians have usually been liberal in politics and in their historical perspectives. Most of them have been sympathetic toward Wilson and Roosevelt, critical of Harding and Hoover, and compassionate toward Truman and Eisenhower.
One of the most prominent of these historians, Arthur M. Schlesinger, Jr., is now engaged in a monumental effort to portray John F. Kennedy as the spiritual heir of Franklin D. Roosevelt. The effort is disguised as history, and indeed, the three volumes of The Age of Roosevelt published so far bear remarkable resemblances on occasion to historical works. To be perfectly fair, one must admit that the three volumes resemble history as closely as do most such works by academic historians, and if one bears in mind that this is history as seen by a liberal, by one who does not believe in laws of history, one can learn much from the books. One can, to begin with, learn most of the dates, names, and events that were important in the United States after the end of World War I when Schlesinger’s chronicle begins. One cannot, however, learn from these volumes what it was like to be an unemployed worker during the depression, for even some liberal historians have criticized Schlesinger’s account as having been written from above the battle, from the viewpoint of a government bureau in Washington, with no real “feel” for the grass roots. One can, from the three books, gain certain insights into the thinking of New Deal office-holders and Roosevelt himself, and into some of the problems they faced and their methods of dealing with them. One cannot, on the other hand, learn from these books the limits and nature of the liberal ideology of the New Deal, for the very good reason that Schlesinger shares that ideology completely. Schlesinger’s writing on the New Deal is liberalism’s own view of itself.
The New Deal left no literature explaining and developing its theory. Liberals in general, and the New Dealers in particular, have not often until recently felt called upon to present a political answer to Marxism, because Marxism in the United States has never constituted a serious enough challenge to impel liberalism to define itself. Only during the cold-war period, when American capitalism has been challenged from abroad by socialism, have spokesmen for liberalism begun filling the bookshops and magazine columns with “theoretical” analyses of their political creed.
What is this newly-analyzed theory with a history of several centuries? Liberalism was born from the struggle of the young European bourgeoisie in the seventeenth and eighteenth centuries against feudal class relations and the ideology of feudalism that decreed that each man should inherit his father’s status and occupation. The revolutionary capitalist replied that each individual should be free to carve out his own place in society. To the feudal notion that members of a society must work as a unit, each in his own place in a hierarchy, the bourgeois replied that men were inherently equal, and must have liberty to compete with each other, and that if each man pursued his own economic interest, the interests of all would be served. To the feudal dogma that the Church determined what was true and what was false the capitalist replied that ideas, like commodities, should be free to compete in the marketplace. Liberalism was the bourgeoisie’s ideological weapon in its struggle for economic and political power. The nature of its feudal enemy determined that that ideology should defend liberty, individualism, and the replacement of dogma by a faith in the rationality of man.
In time capitalism triumphed, and liberalism changed from the philosophy of a revolutionary class to the philosophy of a reactionary class. The tenets that had helped destroy the old order became doctrines upholding the capitalist order. The early liberal had demanded the right to look at the world with an open mind, untrammelled by established dogma; the modern liberal uses the “open mind” argument to discredit a revolutionary science of society which it labels “dogma.” The early liberal had emphasized the attitude of skepticism in the service of a rational mind, a method of seeking truth without any preconceived end in view; in a feudal society this method could only have a revolutionary content. The modern liberal still emphasizes the method of skepticism, but the implicit content is now reactionary. By exalting the method of skepticism into a principle he avoids analysis of the facts and laws of social change. The early liberal had claimed liberty and equality for all men in a society in which class lines were rigid and obvious. The modern liberal also claims to speak for all humanity, and in so doing retards the development of class consciousness. The early liberal had claimed the right to test his ideas in practice regardless of the absolute and eternal truths promulgated by the Church. The modern liberal exalts practice to a principle and often denies that objective truth itself can exist.
All these characteristics of modern liberalism, combined under the heading of pragmatism, can be found in Schlesinger’s account of the New Deal. Where others have criticized the hit-and-miss character of New Deal legislation, Schlesinger sees wholesome experimentation and ridicules those who are “enslaved by a theory of the past, or by a theory of the future.” Where others have criticized the New Deal’s lack of direction, Schlesinger praises its down-to-earth realism in tackling problems as they arose. When faced with concrete programs for a socialist reconstruction of society, however, the liberal “realists” retreat into abstract slogans about individual freedom and the open society. Ironically, the “eggheads” and “intellectuals” in the Roosevelt and Kennedy administrations, who are the butts of conservative ridicule, are among the most energetic propagandists for anti-intellectualism.
In addition to the New Deal’s pragmatism, Schlesinger emphasizes most the humanitarianism of the Roosevelt administration. It served the interests of capitalism by saving their system, and of workers and poor farmers by providing relief and social legislation. It worked, allegedly, for the benefit of all Americans. It refused to identify people as capitalists or workers or farmers but rather saw them as individuals with the inalienable rights of citizens. Liberal theorists have only scorn for those who uphold the interests of the working class; how much nobler it is to defend the rights of all human beings! But people exist in classes, i.e., in some relation to the means of production. In this context, to be for all humanity is to be for a non-existent abstraction, which is hardly consistent reasoning in a hard-headed pragmatist.
One corollary of the broad humanitarianism of liberalism and the New Deal is the theory that the liberal state is neutral in the class struggle. The New Deal, say the liberals, increased the power of the federal government because private economic power had grown so large that only a strong government could exercise the necessary control in the interest of all Americans. The humanitarianism of Roosevelt (which, incidentally, we have no reason to deny) is in Schlesinger’s theory a symbol of the classless character of the state. A liberal President, according to this view, presides impartially over a nation composed not of irreconcilable classes but of reconcilable “interests groups.” When President Kennedy today speaks of the “national interest” which all Americans share, he is expressing this same philosophy of the impartial state which Roosevelt did so much to disseminate among the working class.
Bourgeois democracy is the only exploitative system in which the badges of political power (right to vote, to practice law, to join the police force, etc.) are not the monopoly of the ruling class. Theoretically, the working class and farmers have the legal right to use their majority of ballots in any way they choose. More importantly, the workers are organized in large industrial plants and could easily become conscious of their power. Therefore, it is even more essential for the capitalist class than it was for the ancient slaveowners or medieval nobility to convince the masses of people that the state rules in behalf of all citizens. The slaveowners and nobles persuaded the slaves and serfs that class rule was right; the liberal bourgeoisie tells the workers there are no classes. The old ruling classes justified the status quo; the new ruling class denies its existence.
The more potential political power the oppressed classes possess, the more urgent it is for the ruling class to insure that that potential power is not transformed into actual power. In the United States this is assured chiefly by the myth that fundamental differences divide the two major parties. When the New Deal and the Old Guard fought bitterly over the size of the concessions to give the workers and farmers, their fury was increased by the quadrennial need of the two parties to denounce each other and thus attract votes. The dispute between FDR and the Old Guard nailed the workers even more securely in the Democratic Party, which they believed to be their own. The two-party system is thus a self-perpetuating trap built on the key myth of liberalism that the state is neutral in the class struggle.
Still another tenet of modern liberalism reflected in Schlesinger’s works is its insistence that liberalism does not serve any economic system, but that it works in behalf of human freedom in general. For example, liberalism, say the liberals, does not oppose socialism per se; it is against tyranny wherever one finds it. Today the progress of the Soviet Union is making it impossible for liberals to continue to assert that socialism is economically unsound. Schlesinger and others now deny that the American system is “capitalism.” It is, rather, a “mixed economy” (sometimes called “people’s capitalism”), combining the individual freedom of capitalism and the social welfare of socialism, including the “best” and excluding the “worst” features of both systems. While stealing the thunder of socialists, this theory of the “mixed economy” also reinforces the myth of the impartial state. As more and more corporation executives and millionaires become government officials, their scholarly defenders emphasize ever more insistently the non-capitalist character of the state. All the more necessary is it, then, for liberals to emphasize that, in their view, “democracy” is a method, a framework for rational action into which any economic content can be poured, provided it allows equal rights to capitalist and worker alike and does not claim to have discovered any laws of history.
The real meaning of this theory that liberal democracy is a contentless method may be discerned by analyzing a favorite formula of the chief liberal philosopher, John Dewey. He used “democracy” and “intelligence” as equivalent terms to signify the method of solving differences of opinion peacefully and justly.
Dewey wrote that “There is an undoubted objective clash of interests between finance-capitalism ... and idle workers .... But what generates violent strife is failure to bring the conflict into the light of intelligence where the conflicting interests can be adjudicated in behalf of the interest of the great majority. “What seems to be merely a method for solving disputes thus turns out to be a theory that the conflicting interests of workers and capitalists can be reconciled in the interest of “society.” The method of intelligence, or democracy, or liberalism, turns out to be class-collaborationism, bourgeois democracy. Schlesinger himself admits this obliquely in the first volume of The Age of Roosevelt (pp. 202-03) when he describes the various solutions proposed by New Dealers, and adds that “these men were all pragmatists rather than dogmatists. They were united by a determination to work within the existing system...”
Liberals always define liberalism in terms of rationalism, the open mind, and the open society at the service of the individual. Those are precisely the values that the conservatives claim to cherish better than the liberals. Their differences amount to competing claims to be able to further those ideals better. Schlesinger wrote in The Age of Jackson (p. 522) that ”... the object of liberalism has never been to destroy capitalism, as conservatism invariably claims - only to keep the capitalists from destroying it.” Their differences, then, are differences not of ends but of means, that is, methods. Both are in the tradition of the liberalism of the eighteenth and nineteenth centuries; a minor shift of terminology has taken place. A recent example of liberal-conservative differences over methods was the McCarthy witchhunt. The liberals who said they agreed with McCarthy’s aims but deplored his methods were not in all cases the dupes that some radicals believed; they were, rather, stating accurately the sole ground, other than personal motives, on which they differed with McCarthy. In modern times the chief difference in means between conservatives and liberals concerns the power of the state. Conservatives generally prefer the federal government to let businessmen run the economy with a minimum of supervision. Liberals prefer a federal government with sufficient power to level out the ups and downs of the business cycle as far as possible and to placate the working class with social-welfare legislation. The conservatives’ government purports to give favors to no class; the liberals’ welfare state showers favors on all.
Today neither major party has an effective voting majority. Therefore, Schlesinger, a member of the Kennedy administration, has undertaken to win to the New Frontier some of the segments of the population included in the New Deal coalition in the 1930’s. His multi-volumed history of the New Deal, in essaying to portray Kennedy as the political heir of FDR, is performing a service to the American Left. By demonstrating the common ideology of both New Deal and New Frontier, it inadvertently demonstrates the dead end which that ideology has reached in the 1960’s. Whereas liberalism in the domestic crisis of thirty years ago could give the people large concessions, it now finds itself, in the world crisis of today, with little room left in which to maneuver. Where during the 1930’s it could rely on the reformist carrot, it now leans more and more toward the repressive stick. Perhaps one reason for the recent spate of theorizing on the “philosophy of liberalism” is the need to emphasize the ever-shrinking distance between liberalism and its conservative offshoot. Schlesinger is right: the New Frontier is indeed the ideological and political descendant of New Deal liberalism. The crisis of world capitalism is today the crisis of liberalism.
 The three volumes are: The Crisis of the Old Order: 1919-1933, published 1957; The Coming of the New Deal, published 1959; and The Politics of Upheaval, published 1960. The publisher is Houghton Mifflin Company, Boston. The third volume takes the story down to the 1936 election. Further volumes are being written, presumably in Schlesinger’s spare time as a member of the Kennedy administration.
 Some such recent writings are: “Conservatism vs. Liberalism – A Debate” ( articles by Russell Kirk and Arthur M. Schlesinger, Jr.), New York Times Magazine, March 4, 1956, pp. 58, 60, 62; Arthur M. Schlesinger, Jr., “The One Against the Many,” Saturday Review, July 14, 1962, pp. 9-11, 54-55; K. R. Minogue, “The Modern Liberal’s Casebook, ” The American Scholar, XXXI (Summer, 1962), 359-72; Glenn Tinder, “Is Liberalism Out-of-Date?” The Journal of Politics, XXIV (May, 1962), 258-76; Arthur M. Schlesinger, Jr., The Vital Center (Boston: Houghton Mifflin Company, 1949); Daniel Boorstin, The Genius of American Politics (Chicago: University of Chicago Press, 1953).
 The Age of Jackson (Boston: Little, Brown and Company, 1946), 522.
 Schlesinger’s theory of the “mixed economy” is conveniently explained in “The One and the Many,” cited in footnote2.
 Intelligence in the Modern World (Garden City: The Modern Library, Random House, Inc., 1939), p. 444. This volume is a collection of Dewey’s writings. The quote is from his Liberalism and Social Action.