On June 27, 1936, President Franklin D. Roosevelt proclaimed his famous Acceptance Speech for the Renomination for the Presidency at the Democratic National Convention. He touched many important economic and political problems of those days, the solving of which would affect the country positively as well as preserve the economic and political freedoms of the United States, for which the nation’s founding fathers Washington and Jefferson had fought.
During the 1930s, America faced a severe economic collapse – the Great Depression. It was a key moment in the world history of modern capitalism. This point is vital for the understanding of the tasks encountered by Americans as they confronted such an unprecedented catastrophe of the economic system. Americans of all social levels had to manage the disaster, which exposed the failure of business, government, and society to control the market. As consequence, this situation caused many difficulties in the modern civilization such as political autocracy, industrial dictatorship, poor conditions of labor, and economic inequality.
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The precondition of that situation was the shortcoming of the capitalist system. In time when the American industry grew up, the ordinary workers and farmers met a transformed world of growing inequalities. Since by the end of the 19th century, American businesses busily exported products to foreign markets, the integrated global economy, in its turn, launched waves of immigrants across national borders. As a result, in America, domestic discontent appeared, and confrontations between labor and capital became more violent. To prove the idea, FDR blamed the “economic royalists” – the bankers and industrialists, including Andrew Carnegie’s U.S. Steel, John D. Rockefeller’s Standard Oil, and General Motors. According to FDR, these corporations “carved new dynasties…Through new uses of corporations, banks, and securities, new machinery of industry and agriculture, of labor and capital – all undreamed of by the fathers – the whole structure of modern life was impressed into this royal service.” Therefore, Americans initiated a radical rethinking of the essence of capitalism in America and inspired a reform movement such as the New Deal.
The New Deal was a program that identified the American economy as a decelerated system with the unbalanced forces in it. For instance, the capitalist enterprise opportunities contracted because the population ceased to expand, new big industrial fields did not open up, and oversea outlets were shut off by high tariff walls. Thus, capitalism confronted with a downfall of the profit rate. In addition, the world market was no longer open for the American agricultural goods, and the values of farmland declined. In addition, professional and white-collar workers as well as industrial laborers were in surplus, and a social class border was determined. Under those conditions, the great owners of the means of production maintained themselves by a debasement of the living standards of the other classes in society.
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For transforming the economy and nation’s society, the New Deal had some of the long-standing and most important achievements such as legal support for organized labor, the creation of Social Security, and the changing role of public works policy. In other words, the goal of the New Deal was the establishment of a permanent truce on class antagonisms by the restoration of the purchasing power and fixing the just price. For example, the American farmer was to be restored to the capital and consumption markets by giving him a just price for his commodities based on the production limited to the home market. The industry was to be revived in somewhat different way, although again, the just price was to be specific. The New Deal was not prepared to guarantee a fair return on his investment directly to every large enterpriser and every rentier, but it moved toward this goal just the same if somewhat circuitously. The New Deal planned to save labor also through the just price. The industrial codes were to have a dual purpose: they were not only to protect the industry from its own baser instincts but also to provide further opportunities for the employment of labor through the establishment of basic maximum working hours and minimum wages and the elimination of child labor. The purchasing power of the working class was to be restored by increasing the total number of persons in industry and by raising the per capita wage of sweated workers to a subsistence level.
FDR described the New Deal’s reforms as “a struggle for, and not against, American business. It is a struggle to preserve individual enterprise and economic freedom.” Although the New Deal had not cured the Great Depression by the summer of 1936, there was enough evidence to support FDR’s case that the New Deal had made positive strides against the economic disaster. Ultimately, unemployment, while still high, was in decline, and the industrial businesses experienced their best performances. With the facts on his side, Roosevelt used humor effectively to gently mock his critics who charged he had not accomplished enough with the New Deal. FDR often took on his opposition directly, attacking them as “economic royalists” who were looking to create a “new industrial dictatorship” because of the fact that employees could not control their labor conditions, wages, and working hours.
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In the end, the New Deal’s program intervened in the economy with sufficient success, halted the nation’s economic crisis, and changed the political loyalties of many Americans. This shift in the nation’s political economy and the nation’s politics had a number of profound consequences not only for the backlash that soon developed against FDR and his reforms but also for American culture and society more generally in ways that still resonate today.
