A Reader asked: Do you think FDR succeeded turning around great depression or was it the war or some otherwise unprogrammed, or accidental recovery?
I'm tempted to say it was the war. We went into a recession in 1945 and again in 1949. The '45 recession was due to demobilization and the switch to a non-war economy. So, did the war rectify or simply alleviate the economy?
As for the New Deal, there's a difference between engineering a recovery and preventing the bottom from falling out. Basically FDR organized charity on a grand scale. In fact he often talked about his programme in exactly those charitable "help-the-neighbour" terms. The cruel irony is that the most successful of these "government charities" -- the WPA -- had already been drawn up by the Hoover Administration. (Reconstruction Finance Corp. becoming the WPA and the Emergency Relief Admin. becomeing the Federal Emergency Relief Admin and then again the WPA).
A lot of what FDR did was "uplifting spirits". There's a marvellous clip I could not find of Eleanor in Concert getting people to sing. "When you're down and blue, I find it often helps to sing...." she chirps before leading the audience in song. This is why Communists carp that all FDR did was save capitalism from itself with a lot of razzle dazzle. In a sense that is true. But it is also true (as Pope Benedict might say) that fostering Hope & Charity (Spe et Caritas) is good in itself. Getting people to think and act altruistically is not without effect on political-economies.
FDR did something else, apart from preventing the bottom from falling out. He used the occasion to institute fascism (lite) in the USA. In economic terms fascism is simply the third way between pure liberalism and pure socialism. It preserves private corporate property as an economic engine, but subjects it to limits and controls for the sake of the Folk, the State, the "Public Good".
Hitler remarked that FDR was doing the "right" thing; and of course everyone else looked to Germany, as providing the best and ultimate model for the solution to the crisis in mass, capitalism. The parallels, substative and symbolic, between the New Deal and the New Reich were unmistakable. Germany's reconstruction was more successful not because it was smaller (80 million vs. 120 million is not that huge of a difference), but because Bismarck had already laid the groundwork for the national-social state whereas Roosevelt had to fight a century of entrenched corporate liberalism.
But here's the rub: who pays for the recovery? Put another way: if the Third Way Engine remains essentially capitalistic, then things must still be paid for in a capitalistic way and we haven't really escaped capitalism's defects or capitalist accounting. We must still payer le banquier. "Public government" gets a credit rating as if it were a private person and just like a private consumer must search for terms "on the open market" and pay back to private persons the debts owed. There is nothing "mid-way" about this. The Nation - the Sovereign All Of Us -- is simply reduced to the level of yet another participant within the capitalist construct.
Communists and socialists use this fact as proof that National Socialism was at best capitalist theatre and farce. Leftist Nazis argue that, on account of the war, they never really got a fair chance to implement the socialist part of their programme; that the interests of business were in fact subsumed to the welfare of the Folk Community; that the debasement of the State to the level of a private debtor was the very essence of National Socialist critique and of Germany's rejection of the Dawes Plan.
The real economics underlying the World War are pretty complicated and remain buried under heaps of propaganda and soap opera. What we do know is that, in Germany, the success was ultimately due to Hjalmar Schacht's astonishing legerdemain. From what I've been able to fathom, he basically cooked the books, deferring the true cost of Hitler's reconstruction. By "true cost" I mean that ultimately there is a real term value/difference that has to be paid up. How did Nazi Germany pay it? Basically by plundering France and conquering Poland. The books were balanced by massive transfers of wealth to the Reich.
Was it any different for the USA? Our conquest of Europe basically resulted in massive transfers of wealth to us. At the end of the War we were the only country left standing (aside from Argentina). We held all the cards and imposed the dollar on the world. This enabled us to pay for our war and our recovery and our great suburban sprawl with all its "stuff".
I think the Marxist-Leninist critique was correct. Regulated or not capitalism always requires (and is very good at) shifting true costs. We were able to do "trickledown" for 40 years basically because Bretton Woods, free oil, petro-dollars, and Latin America paid for it. During the Post War Miracle, it looked as if American National Capitalism was copiously trickling down benefits on the New Middle Class. It was; but only because it was making up the difference off-stage.
When the hidden source of surplus value dries up, capitalism has to find another source. If it doesn't then the mask falls off. That's what NAFTA was about. As of 1994, American capital could not afford trickledown anymore. It could not pay decent wages. Rather than obviously debase the American worker to pre-Union levels of subsistence, it went to Mexico and Malaysia to do it to them.
The cruel joke is that the American worker got debased anyway... You can't more debased than not having a job at all. This is what Clinton called "retooling".
So what was it the New York Times opined the other day? That it was not feasible for the American worker to expect compensation levels higher than the "global norm"? If "America" [ie Corporate America] is to economically recover, the American worker is going to have to "compete" with workers overseas [i.e. bend and grovel as low as they do].
There is much one can criticise about his policies, but FDR would never have said such a thing.
.
As for the New Deal, there's a difference between engineering a recovery and preventing the bottom from falling out. Basically FDR organized charity on a grand scale. In fact he often talked about his programme in exactly those charitable "help-the-neighbour" terms. The cruel irony is that the most successful of these "government charities" -- the WPA -- had already been drawn up by the Hoover Administration. (Reconstruction Finance Corp. becoming the WPA and the Emergency Relief Admin. becomeing the Federal Emergency Relief Admin and then again the WPA).
A lot of what FDR did was "uplifting spirits". There's a marvellous clip I could not find of Eleanor in Concert getting people to sing. "When you're down and blue, I find it often helps to sing...." she chirps before leading the audience in song. This is why Communists carp that all FDR did was save capitalism from itself with a lot of razzle dazzle. In a sense that is true. But it is also true (as Pope Benedict might say) that fostering Hope & Charity (Spe et Caritas) is good in itself. Getting people to think and act altruistically is not without effect on political-economies.
FDR did something else, apart from preventing the bottom from falling out. He used the occasion to institute fascism (lite) in the USA. In economic terms fascism is simply the third way between pure liberalism and pure socialism. It preserves private corporate property as an economic engine, but subjects it to limits and controls for the sake of the Folk, the State, the "Public Good".
Hitler remarked that FDR was doing the "right" thing; and of course everyone else looked to Germany, as providing the best and ultimate model for the solution to the crisis in mass, capitalism. The parallels, substative and symbolic, between the New Deal and the New Reich were unmistakable. Germany's reconstruction was more successful not because it was smaller (80 million vs. 120 million is not that huge of a difference), but because Bismarck had already laid the groundwork for the national-social state whereas Roosevelt had to fight a century of entrenched corporate liberalism.
But here's the rub: who pays for the recovery? Put another way: if the Third Way Engine remains essentially capitalistic, then things must still be paid for in a capitalistic way and we haven't really escaped capitalism's defects or capitalist accounting. We must still payer le banquier. "Public government" gets a credit rating as if it were a private person and just like a private consumer must search for terms "on the open market" and pay back to private persons the debts owed. There is nothing "mid-way" about this. The Nation - the Sovereign All Of Us -- is simply reduced to the level of yet another participant within the capitalist construct.
Communists and socialists use this fact as proof that National Socialism was at best capitalist theatre and farce. Leftist Nazis argue that, on account of the war, they never really got a fair chance to implement the socialist part of their programme; that the interests of business were in fact subsumed to the welfare of the Folk Community; that the debasement of the State to the level of a private debtor was the very essence of National Socialist critique and of Germany's rejection of the Dawes Plan.
The real economics underlying the World War are pretty complicated and remain buried under heaps of propaganda and soap opera. What we do know is that, in Germany, the success was ultimately due to Hjalmar Schacht's astonishing legerdemain. From what I've been able to fathom, he basically cooked the books, deferring the true cost of Hitler's reconstruction. By "true cost" I mean that ultimately there is a real term value/difference that has to be paid up. How did Nazi Germany pay it? Basically by plundering France and conquering Poland. The books were balanced by massive transfers of wealth to the Reich.
Was it any different for the USA? Our conquest of Europe basically resulted in massive transfers of wealth to us. At the end of the War we were the only country left standing (aside from Argentina). We held all the cards and imposed the dollar on the world. This enabled us to pay for our war and our recovery and our great suburban sprawl with all its "stuff".
I think the Marxist-Leninist critique was correct. Regulated or not capitalism always requires (and is very good at) shifting true costs. We were able to do "trickledown" for 40 years basically because Bretton Woods, free oil, petro-dollars, and Latin America paid for it. During the Post War Miracle, it looked as if American National Capitalism was copiously trickling down benefits on the New Middle Class. It was; but only because it was making up the difference off-stage.
When the hidden source of surplus value dries up, capitalism has to find another source. If it doesn't then the mask falls off. That's what NAFTA was about. As of 1994, American capital could not afford trickledown anymore. It could not pay decent wages. Rather than obviously debase the American worker to pre-Union levels of subsistence, it went to Mexico and Malaysia to do it to them.
The cruel joke is that the American worker got debased anyway... You can't more debased than not having a job at all. This is what Clinton called "retooling".
So what was it the New York Times opined the other day? That it was not feasible for the American worker to expect compensation levels higher than the "global norm"? If "America" [ie Corporate America] is to economically recover, the American worker is going to have to "compete" with workers overseas [i.e. bend and grovel as low as they do].
There is much one can criticise about his policies, but FDR would never have said such a thing.
.
