Imagining a world without the New Deal
By David F. Weiman,
Economics professor David F. Weiman asks what life would be like without Social Security, cheap electricity and Reagan National Airport
The tea party’s backlash against the federal government envisions a return to an earlier, supposedly golden era in American history. Rep. Paul Ryan’s budget plan floated in April would essentially privatize Medicare and Medicaid while lowering taxes on the top income bracket to their pre-1930 rate. House Republicans’ plan to solve the recent debt crisis would have shrunk the government to its 1950s size.
In other words, conservative plans like these would effectively repeal Franklin D. Roosevelt’s New Deal.
So, what would a world without the New Deal look like?
It would be a fight for economic survival with no coordinated effort at recovery. The New Deal shifted responsibility for social welfare and economic development from city halls and state capitols to Washington. Starting in 1933, New Deal programs such as the Civilian Conservation Corps created more than 3 million jobs over the next three years. But like the recent Recovery and Reinvestment Act, New Deal spending was too modest — by 1932, nearly 12 million workers, or more than 25 percent of the labor force, were unemployed.
Still, FDR exercised his authority to put America back to work. Any who doubt the New Deal’s effectiveness need only look at the double-dip recession of 1937, after a conservative backlash in Congress scaled down relief spending. Without Roosevelt’s intervention, the economic recovery that lasted from 1933 to 1937 would have been weaker and shorter — not unlike our own recovery after the Great Recession.
But the New Deal brought more than jobs — it enhanced quality of life, especially among the most vulnerable. We can see its impact on infant mortality, which increased during the early years of the Depression after falling sharply for more than a decade. Without the New Deal’s health and nutrition initiatives as well as investments in water and sewage-treatment infrastructure, millions of lives would have been lost.
This new idea of a federal safety net not only inspired Social Security in the 1930s, but also Lyndon B. Johnson’s Great Society of the 1960s. FDR and LBJ asked all working adults to care for American seniors and the poor. Before the New Deal, it was unthinkable that retired people could turn to the government for income or medical care. That responsibility fell directly to their children, if they had them. That’s why the Republicans’ proposed cuts to Medicare are so shocking — they shift these costs from the federal budget back to the family budget.
But even if these cuts get through Congress, they can’t take away America’s infrastructure. The New Deal’s Public Works and Works Progress administrations spurred rapid productivity growth in the midst of the Depression. New roads and electrical power networks paved the way for post-World War II economic expansion built around the automobile and the suburban home. Astonishing 21st-century innovations such as next-day FedEx deliveries and Wi-Fi still rely on these aging investments. We associate FDR with massive hydroelectric dam projects — including the Grand Coulee and Hoover dams in the West, and the Tennessee Valley Authority in the South — but the New Deal also electrified rural America through cooperatives that distributed cheap, reliable power. Nearly 12 percent of Americans still belong to these collectives. Without the New Deal, they would be stuck in the much darker 1920s.
As would modern travelers. Without the New Deal, New York commuters would be without the FDR Drive, the Triboroughand Whitestone bridges, and the Lincoln and Queens-Midtown tunnels. There would be no air traffic at LaGuardia and Reagan National airports. D.C.’s Union Station, wired for electricity during the New Deal, would have a very different food court. Between New York and Washington, Amtrak runs on rails first electrified during the New Deal.
Out West, the New Deal gave us Golden Gate Bridge access ramps, the Oakland-San Francisco Bay Bridge, the first modern freeways, and San Francisco and LAX airports. Between the coasts, it brought more than 650,000 miles of paved roads, thousands of bridges and tunnels, more than 700 miles of new and expanded runways, improvements to railroad lines, and scenic routes such as the mid-South’s Natchez Trace Parkway. Without the New Deal, of course, some of these would have eventually been built by state and local governments or the private sector — years after America’s recovery from the Depression.
Moreover, private infrastructure improvements would have bypassed poor regions such as the South. Because of its vision and virtually unlimited borrowing capacity, the New Deal underwrote Southern modernization with new roads, hospitals, rural electrification and schools. These public investments paid off. After 50 years of stagnation, average Southern incomes began to catch up with the national average during the New Deal era. Even today, the South receives more federal money than it pays in taxes. Though the South has embraced tea party conservatism, the former Confederacy would probably lag behind the rest of the country in a world without the New Deal.
Across America, the New Deal fashioned a new social order that empowered marginalized groups, notably industrial workers. Through support for unions and the Wagner or National Labor Relations Act, FDR codified workers’ power to bargain for fair wages, reasonable hours and safer working conditions. These policies, as well as steeper, more progressive income taxes, secured a more equitable income distribution from the end of World War II to the late 1970s. And the Fair Labor Standards Act — mandating a minimum wage, a 40-hour workweek and improved working conditions — brought benefits to all workers, not just those in unions. The New Deal gave us the weekend. Would we have one without it?
Beyond days off, a New Deal for labor built on the founders’ principle of countervailing political power. Unlike his cousin Teddy, FDR was not a famed “trust buster.” Still, while endorsing cartel-like control over key industrial sectors, his New Deal encouraged trade unions to curb the economic power of big business. With the dramatic increase in private-sector union membership in the 1940s, millions of workers could assert their collective voice in the political process on par with large corporations, while federal agencies mediated conflicts and forged compromise between organized private interests.
This last legacy of the New Deal — fairness — may be its most important. If House Republicans have their way, we may be stranded in a world without it.
David F. Weiman is a professor of economics at Barnard College.