George Novack

Autopsy of the New Deal

(May 1940)

Source: Fourth International, Vol.1 No.1, May 1940, pp.10-13.
Transcription/Editing/HTML Markup: 2006 by Einde O’Callaghan.
Public Domain: George Novak Internet Archive 2006; This work is completely free. In any reproduction, we ask that you cite this Internet address and the publishing information above.

ROOSEVELT rode into office thundering against “the economic royalists” on the home front. In 1932 he threatened “to drive the money-changers out of the temple.” In accepting his second nomination four years later, he again challenged (in words) “the despotism of the privileged princes of the new economic dynasties” and pledged himself to fight against “the resolute enemy within our gates.” “Here in America,” he concluded, “we are waging a great war. It is not alone a war against want and destitution and economic demoralization. It is a war for survival of democracy.... I am enlisted for the duration of the war.”

Now, in 1940 we hear equally martial music from the White House but on a different theme. The struggle against “the malefactors of great wealth” at home has been set aside for the struggle against “foreign aggressors.” Instead of castigating “America’s 60 Families” on ceremonial occasions, Roosevelt seizes every opportunity to denounce Hitler and Stalin. Today these totalitarian tyrants, and not our own economic tyrants, are the main enemies of “democracy.” The offensive against social evils is no longer to be conducted within our national boundaries but transferred to the world arena where the other imperialist powers are already at war.

Why does Roosevelt subordinate domestic issues to foreign problems? On one hand, he is anxious to conceal, so far as possible, the complete collapse of the New Deal program. On the other hand, he must prepare the people of the United States for total intervention in the imperialist tournament. In order to make war abroad, Roosevelt had first to make peace with “the enemy within our gates” and place himself unreservedly at the service of the masters of capital.

This change in Roosevelt’s pronouncements reflects the profound reversal in the trend of his policies since he took office. The significance of this shift can be summarized in a sentence. The New Deal has been replaced by the War Deal.

There is an important difference between these two phases of Roosevelt’s politics. Roosevelt’s campaign against the economic royalists was largely a sham battle, limited to minor issues. His fulminations against them were not to be taken seriously. Quite otherwise with his invectives against Hitler and Stalin. This time Roosevelt means business. Instead of opposing himself to the plutocrats, he is engaged in carrying out their commands. The offensive against them that fizzled out so quickly and so completely is to be fought to a finish against the enemies of American imperialism.

“This generation has a rendezvous with Destiny!” proclaimed the President in 1936. This destiny, we see in 1940, is to be a rendezvous with death on the battlefields of the new world war.

Life and Death of the New Deal

Although the parents of the New Deal have not yet officially admitted its death, it has long since ceased to be a living movement, a practical guide and inspiration for the conduct of the rulers at Washington. Only its corpse remains. Before its burial, it would serve political science to conduct a brief inquest into the causes of its death and the nature of its successor.

The New Deal was a political product of the predicament in which American capitalism found itself as the result of the world crisis since 1929. This crisis culminated in the breakdown of the economic system when all banks closed on March 4, 1933.

This was the day Roosevelt took over the presidency.

The New Deal represented the response of the new capitalist regime to this potentially revolutionary situation. Roosevelt and a subservient Congress hastily enacted a series of measures to prop up the prostrated body of American capitalism and restore some of its vital energy.

The improvised, purely opportunistic nature of the New Deal policies was indicated by the fact that its most important features were not mentioned in the Democratic Party platform upon which Roosevelt had presumably been elected. At several points, notably the promises to cut down governmental expenditures by twenty per cent and to balance the federal budget, they were directly contradictory.

The New Deal in the United States was an outgrowth of the same general economic and social factors which gave rise to Fascism in Germany and Austria. They were symmetrical political phenomena. The disintegration of capitalist economy everywhere menaced the power of monopoly capital. In order to beat back the rising revolt of the working masses and to strengthen their shaken domination, the capitalist class in one country after another resorted to drastic action. Big Business in the poorer capitalist nations, the so-called “proletarian nations” in Mussolini’s phrase, bound their populations in the totalitarian straitjacket of Fascism before putting them in uniform to fight for “a place in the sun.”

Thanks to their immense resources, the wealthier imperialists were enabled, for a time, to find a somewhat less violent and reactionary solution for the same problem. They took, not the road of fascist counter-revolution but the road of reform. They sought to maintain their rule with some semblance and substance of popular support. Such was the nature of the short-lived Popular Front in France. Such, above all, was the New Deal. “We took the middle road,” said Roosevelt, “between naked reaction and revolution.”

In a speech at Philadelphia on June 27, 1936 the President declared:

“In the spring of 1933 we faced a crisis which was the ugly fruit of 12 years of neglect of the causes of economic and social unrest. It was a crisis made to order for all those who would overthrow our form of government... We met that emergency with emergency action... We were against revolution. Therefore we waged war against those conditions which make revolutions – against the inequalities and resentments which breed them.”

The New Deal brand of Liberalism, he pointed out to short-sighted plutocrats who protested against his policies, “becomes the protection for the farsighted conservative.”

The principal task imposed upon the Democratic administration was the rescue of American capitalism. Roosevelt solicited the support of American business men in reward for fulfilling this job.

“No one in the United States,” he proclaimed on October 23, 1936, “believes more firmly than I in the system of private business, private property and private profit. No Administration in the history of our country has done more for it. It was this Administration which dragged it back out of the pit into which it had fallen in 1933.”

Through its monetary measures, through the RFC, AAA, NRA, HOLC, FCA, the FDIC and other agencies, through its public works program, the Federal government mobilized its full resources behind the magnates of Big Business and High Finance. Aided by an upswing in world economy, American capitalism recovered part of its strength in the following five and a half years.

As the claims of the lower orders in the United States for relief could not be utterly denied, the New Deal gave certain concessions to them. Through the AAA, its subsidy and crop-restriction measures, the New Deal aided the wealthier farmers. Through the HOLC, some small homeowners ; through the FDIC, small bank depositors. Through WPA and PWA aid was extended to part of the unemployed and jobless construction workers. To the labor aristocracy was given Section 7A of the NRA and later the Wagner Act. To the unemployed youth, the CCC and NYA.

These concessions were meagre compared to the magnificent sums placed at the disposition of the big propertied interests by the state. For every dollar wrested from the government by the lower classes, ten were donated to the plutocracy. Even those measures presumably taken for the exclusive benefit of the poor turned out to benefit the rich no less. AAA payments flowed into the pockets of large landowners and helped drive the agricultural workers off the land. The enormous Federal expenditures for public works not only provided jobs for the unemployed but orders for heavy industry and purchasers for the products of light industry and agriculture. The Social Security Act, which taxed workers’ wages for old age pensions and unemployment insurance, also provided federal income which might otherwise have been taken from capitalist profits.

This part of the New Deal was the price American capitalists had to pay for insurance against social revolution. They paid the premium unwillingly, and have tried at every opportunity since to take back these concessions yielded under pressure to the masses.

The Crisis in the New Deal

The Democratic regime was extremely reckless in its promises. Reviewing the record of his first term, Roosevelt boasted: “We planned it that way!” But the country’s confidence in Roosevelt’s plans, bolstered by the industrial upturn, was severely shaken by the economic decline during the last months of 1937. This crisis showed that the New Deal magic had been effective only partially and for a brief time.

Despite Herculean efforts, American economy under Roosevelt had not attained heights of production surpassing those of 1929. The national income per capita in 1938 was only 76 per cent of that in 1929. The working masses were deeply discontented; their living standards had shrunk steadily. Unemployment was a running sore. The agricultural difficulties persisted. Governmental finances worsened year by year. Neither civil nor world peace was in sight. Instead of bringing general prosperity as it promised to the American people, the New Deal succeeded only in producing a new crisis!

The economic crisis of 1937 marked the turning point in the career of the Roosevelt regime. The obvious failure of the New Deal to fortify American economy against another collapse impelled Roosevelt, as representative of capitalist interests, to seek a new policy. This he found by following the line of least resistance to the insistent demands of the imperialist wing of the big bourgeoisie.

While the New Deal was working out its destiny within the United States, tremendous events were changing the world outside. Germany in the West and Japan in the Far East, hammering at the post-war order constructed by the victors at Versailles, were challenging America’s right to world dominion. Wall Street exerted pressure upon Washington to counteract this challenge.

Roosevelt, ever the opportunist, saw a way out of the crisis confronting his regime by submitting to the dictates of the magnates of imperialism. Wall Street’s mission became his own. The New Deal planks were stowed away or thrown overboard one by one in the dark of the night. New sailing orders were issued to his crew in Roosevelt’s famous speech at Chicago on October 1937. “Steer toward the coming war and make all preparations accordingly.”

The Dialectical Development of Roosevelt’s Politics

The course toward war taken by the Roosevelt administration during the past two and a half years was an inescapable consequence of the international relations of American capitalism and of the contradictory tendencies within the government at its head. Roosevelt’s policies were not arrived at on an independent and purely personal basis but as the resultant of the continuous conflict of forces around him.

Everything contains within itself its own opposite. This was true of the Roosevelt regime. The New Deal, which dominated its initial period in power, aimed to save American capitalism primarily by internal alterations. It was essentially a program of domestic reform designed to adopt the structure and operations of the American state and economy to the changed conditions created by the crisis of 1929-1933.

But from the first an opposing tendency was present within the Roosevelt administration. This militarist tendency sought to solve the problems of American capitalism by broader and bolder measures, by external action, by extending the scope of its imperialist rule over the Western hemisphere and eventually throughout the world. These two lines of action corresponded to the interests of different social forces. The reformists reflected the influence of the liberals and petty bourgeoisie and their followers among the labor aristocracy. The militarist wing represented the outlook and interests of the big bourgeoisie, the real rulers of the United States. Nothing less than the crushing of all competitors and the conquest of the planet could satisfy the appetites of America’s monopolists.

These two contradictory tendencies, united from the beginning in Roosevelt’s administration, were also fused in his own personality. The Assistant Secretary of the Navy in the first World War was a “Big-Navy Man” far more than a crusading social reformer. This inherent contradiction accounted for the two-faced character of the major activities of his administration. Thus the great Tennessee Valley project was represented by the liberals as a social service and to the conservatives as a necessity for national defense. Similarly with the CCC and with the military budget. The iron fist of Yankee imperialism in Latin America was concealed behind the bland hypocrisy of “The Good Neighbor” policy.

The Roosevelt administration was drawn along by both tendencies with the first taking the lead during New Deal days. But with the profound developments in the world situation and the deepening of the crisis, the opposition between his positive program of reforms and its negation, the imperialist adventure, became more and more pronounced. Roosevelt himself was finally obliged to choose between them as their divergencies indicated that the New Deal must yield to the claims of the War Deal.

The Triumph of the War Deal

For many months now the imperialist alternative, which signifies the political victory of America’s 60 Families, has been displacing Roosevelt’s program of reforms. Wherever New Deal measures have conflicted with war measures, they have been sacrificed. This was demonstrated with mathematical precision when the cut in relief appropriations in this year’s budget equalled the increase in military expenditures.

Today New Deal spokesmen head the war-mongers. Although their new course has yet to attain its logical goal of complete participation in the war, it is not far from it. The nature and the direction of its movement is unmistakable and confirmed daily by every speech and action of the Roosevelt regime.

On the eve of his reelection to the presidency on October 31, 1936, Roosevelt reported to the nation:

“I submit to you a record of peace, and on that record a well-founded expectation for future peace – peace for the individual, peace for the community, peace for the nation, and peace with the world.”

On the eve of another Presidential campaign, Roosevelt declared to the Pan-American Union: “We must be prepared to meet force with force.” Thus, on April 15th of this year, Roosevelt submits to the American people: “a record of war, and on that record a well-founded expectation for future war – war for the individual, war for the community, war for the nation, and war with the world.”

The death of the New Deal proves how, under contemporary conditions, even the Croesus of the capitalist world could not solve the problems of its ruling class within national limits and by purely domestic means. The internal contradictions and external pressures drive every great power onto the path of imperialist aggrandizement and attack, and also force it to nullify all experiments with liberal reforms. Fascism and the New Deal were not simply different methods adopted by the big bourgeoisie to deal with proletarian revolution. They were at the same time parallel methods of preparing the nation for war. Both forms of capitalist rule, the fascist and the bourgeois-democratic, must serve the needs of capitalist expansion. In their mutual combat for the wealth of the world they reveal their common destination and cannibalistic character.

Roosevelt’s war policy shows how, under the capitalist regime, the aims and interests of Big Business force themselves through against all obstacles, until they become the official governmental program, even of erstwhile opponents.

“The state is the executive Committee of the ruling class.” This elementary teaching of Marxism has been freshly confirmed by the conduct of the Roosevelt regime.

The precedent of Woodrow Wilson might have put the American people on guard against his Democratic successor. Just as the New Freedom of Wilson’s first administration gave way to war and the old slavery during his second, so the New Deal of Roosevelt is following the same course. Capitalist politicians, whatever their pretentions, cannot act otherwise than in the service of the capitalist bosses.


Last updated on: 4.2.2006