New Deal

:Alternative meaning: New Deal (United Kingdom)

The Origins of the New Deal

On October 29, 1929, the crash of the U.S. stock market—known as "Black Tuesday"—heralded the beginnings of a worldwide economic crisis. In 1929-1933, unemployment in the U.S. soared from 3 percent of the workforce to 25 percent, while manufacturing output collapsed by one-third.

Related Topics:
October 29 - 1929 - U.S. stock market - Black Tuesday - 1933

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Upon accepting Democratic nomination for president on July 2, 1932, Roosevelt promised "a new deal for the American people," a phrase that has endured as a label for his administration and its many domestic changes. Meanwhile, other governments worldwide sought economic recovery by adopting restrictive autarkic policies (high tariffs, import quotas, and barter agreements) and by experimenting with new plans for their internal economies. Britain adopted far-reaching measures in the development of a planned national economy. In Nazi Germany economic recovery was pursued through rearmament, conscription, and public works programs. In Mussolini's Italy the economic controls of his corporate state were tightened. Observers throughout the world saw in the massive program of economic planning and state ownership of the Soviet Union what appeared to be a depression-proof economic system and a solution to the crisis in capitalism.

Related Topics:
Democratic - July 2 - 1932 - Autarkic - Britain - Nazi Germany - Conscription - Public works - Mussolini - Italy - Soviet Union

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Unlike many other world leaders in the 1930s, however, Roosevelt entered office with no single ideology or plan for dealing with the depression. This "new deal" would often be contradicting, pragmatic, and experimental. What many considered incoherence of the New Deal's ideology might more accurately be characterized as the interaction of several competing ideologies, each based on programs and ideas whose precedents lay in U.S. political tradition.

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The New Deal drew heavily on the experiences of its leaders; it reflected the ideas of, and was influenced by, the programs that Roosevelt and most of his original associates had absorbed in their political youths early in the progressive era, while serving in the Wilson administration, and while holding other offices in the 1920s. The New Dealers borrowed their opposition to monopoly and their move toward government regulation of the economy from ideas of the progressive era, and were influenced by the dispelling of age-old notions that poverty was a personal moral failure rather than a product of impersonal social and economic forces. Their ideas about government mobilization were shaped by the efforts of the Wilson administration to mobilize the economy for the Great War. And from the policy experiments of the 1920s, New Dealers picked up ideas from efforts to harmonize the economy by creating cooperative relationships among its constituent elements.

Related Topics:
Wilson - 1920s - Great War

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The New Deal consisted of many different efforts to end the Great Depression and reform the U.S. economy. Their success varied, but there were enough successes to establish it as the most important episode of the twentieth century in the creation of the modern United States.

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