New Deal

:Alternative meaning: New Deal (United Kingdom)

The New Deal and the "broker state"

Government, labor, and business arbitration

Despite the dismal record in aiding marginal farmers and African Americans, among others—contrasted with its often frequent generosity toward certain business interests—the effect of the New Deal was to elevate and strengthen new interest groups so as to allow them to compete more effectively for the interests by having the federal government evolve into an arbitrator in competition among all elements and classes of society, acting as a force that could mediate when necessary to help some groups and limit the power of others. By the end of the 1930s, U.S. business found itself competing for influence with an increasingly powerful labor movement, one that was engaged in mass mobilization and sometimes militant action; with an organized agricultural economy, due to decades of agrarian organization and agitation dating back to the farmers associations and formation of the Populist Party in the late nineteenth century; and with aroused consumers. The New Deal accomplished this by creating a series of state institutions that greatly, and permanently, expanded the role of the federal government in U.S. life. The government was now committed to providing at least minimal assistance to the poor and unemployed; to protecting the rights of labor unions; to stabilizing the banking system; to building low-income housing; to regulating financial markets; to subsidizing agricultural production; and to doing many other things that had not previously been federal responsibilities.

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Thus, perhaps the strongest legacy of the New Deal, in other words, was to make the federal government a protector of interest groups and a supervisor of competition among them. As a result of the New Deal, U.S. political and economic life became much more competitive than before, with workers, farmers, consumers, and others now able to press their demands upon the government in ways that in the past had been available only to the corporate world. Hence the frequent description of the government the New Deal created as the "broker state," a state brokering the competing claims of numerous groups.

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The liberal assumptions that the New Deal acted as the foe of private business interests have been challenged. After all, in many cases New Deal efforts were intended to enhance the position of private entrepreneurs—especially their concerns over inflation—even, at times, at the cost of some of the liberal reform goals that some administration officials espoused. The New Deal also did enhance the positions of some previously disadvantaged groups, but did little or nothing for many others, especially blacks, sharecroppers, and the urban poor.

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Thus, it did not transform American capitalism in any genuinely radical way. Except in the field of labor relations, corporate power remained nearly as free from government regulation or control in 1945 as it had been in 1933. But the New Deal did create the rudiments of the American welfare state, through its many relief programs and above all through the Social Security system. The conservative inhibitions New Dealers brought to this task ensured that the welfare system was limited. Even the most progressive New Dealers were somewhat suspicious about federal power, expansive welfare benefits, and large-scale government expenditures.

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The "broker state" and marginalized interests

The New Deal "broker state" would offer much less influence to those groups either too weak to demand assistance or not visible enough to arouse widespread public support.

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The most notable group to receive much less influence than others in the broker state was African Americans. The Roosevelt administration did not see American blacks as a potent interest group capable of seriously challenging the discriminatory forces against them. While the Roosevelt administration, unlike that of the previous Democratic president—Woodrow Wilson —did not move to increase government discrimination against African Americans, it did relatively little to help lift the social standing of African Americans.

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To the administration's credit, Roosevelt appointed an unprecedented number of African Americans to second-level positions in his administration, perhaps due to the influence of his wife, Eleanor, a vocal advocate of easing discrimination. And African Americans did benefit in significant though limited ways from New Deal relief programs, due, in large measure, to the efforts of Harold L. Ickes, who sought to ensure that such programs did not exclude blacks. As a result, by 1936 the vast majority were voting Democratic; this was a stark change from 1932, just four years earlier, when the vast majority of African Americans were voting Republican. The New Deal thus established a political alliance between African Americans and the Democratic Party that survives to this day.

Related Topics:
Eleanor - Harold L. Ickes - 1936

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However, Roosevelt, not viewing African Americans as a critical interest group, believed that other matters were far more pressing than racial discrimination. Never willing to lose the support of Southern Democrats, he declined to support legislation making lynching illegal while—perhaps hypocritically—denouncing lynching in speeches. He declined to advocate banning the poll tax. Aside from this measure he refused to use the relief agencies to challenge local patterns of discrimination; the NRA tolerated widespread practices of paying blacks less than whites; blacks were largely excluded from employment at the TVA; the FHA refused to provide mortgages to blacks moving into white neighborhoods; and the AAA was ineffectual in protecting the interests of black sharecroppers and tenant farmers.

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However, the New Deal did lay the ground work for the "broker state" to be expanded a generation later, mostly through the work of the next wave of liberal reform—the civil rights movement and the Great Society—to embrace groups marginalized in the New Deal coalition, especially racial and ethnic minorities.

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