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New Deal Liberalism and Postwar Economic Growth
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Franklin Delano Roosevelt's New Deal experimented with a broad range of policies designed to address the crisis of the Great Depression, including direct intervention in the economy, compensatory social insurance, and regulation. The experience of World War II and the emerging challenges of the postwar period transformed the basic assumptions upon which New Deal liberalism rested. As Alan Brinkley states, "The character of the postwar domestic order rested on the assumptions that the goal of national government was to keep economic growth alive through promoting consumption and that American social policy should aim, both as a matter of justice and as a way to increase consumption, to raise the purchasing power of those at the bottom of the income scale."
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Using the documents provided and your knowledge of the time period, explain the nature, causes, and significance of this change in New Deal liberalism. You may agree or disagree in whole or in part with the statement above.
Whatever position you take, be sure to explain the how and to address the who, what, when, and especially the why in your response. Be sure to address the counterargument—what historians might say in opposition to your thesis—and to support your argument with historical evidence. Remember that terms such as "New Deal liberalism" are open to interpretation, so be sure to define your terms carefully. Do not forget to consider the point of view of the source, particularly regarding ideological and party affiliation.
Select three of the following topics to help you develop your essay:
1. the role of World War II in ending the Depression and the fear of the return of the Depression,
2. the role of anticommunism at home in shaping liberalism,
3. the place of civil rights in the New Deal and the Fair Deal,
4. the influence of competition with the Soviet Union and of anticommunism abroad,
5. the shift in government concern from production to consumption,
6. the relationship between suburbanization, government spending, and postwar prosperity.
Primary source: Franklin D. Roosevelt, "Commonwealth Club Speech," 1932.
Background information: Addressing this respected public affairs forum during his first campaign for the presidency, Franklin Delano Roosevelt (1882–1945) articulated his vision of the federal government as guarantor of the nation's economic security.
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The day of enlightened administration has come . . .
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In other times we dealt with the problem of an unduly ambitious central government by modifying it gradually into a constitutional democratic government. So today we are modifying and controlling our economic units.
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As I see it, the task of government in its relation to business is to assist the development of an economic declaration of rights, an economic constitutional order. This is the common task of statesman and business man. It is the minimum requirement of [a] more permanently safe order of things. . . .
Every man has a right to life, and this means that he also has a right to make a comfortable living. He may by [laziness] or crime decline to exercise that right, but it may not be denied to him.
Our government[,] formal and informal, political and economic, owes to every one an avenue to possess himself a portion of that plenty sufficient for his needs through his own work. . . .
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The government should assume the function of economic regulation only as a last resort, to be tried only when private initiative, inspired by high responsibility, with such assistance and balance government can give, has finally failed. . . .
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Franklin D. Roosevelt, "Commonwealth Club Speech," (23 September 1932), in The Public Papers and Addresses of Franklin D. Roosevelt, ed. Samuel Rosenman (New York: Macmillan, 1941), 1:750–52.
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Primary source: Franklin Roosevelt, "Second Inaugural Address," 1937.
Background information: President Roosevelt (1882–1945) began his second term in 1937, confident that his administration's interventionist policies would bring an end to the American depression.
WHEN four years ago we met to inaugurate a President. . . we recognized . . . the need to find through government the instrument of our united purpose to solve for the individual the ever-rising problems of a complex civilization.
We of the Republic sensed the truth that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable. We would not admit that we could not find a way to master economic epidemics just as, after centuries of fatalistic suffering, we had found a way to master epidemics of disease. We refused to leave the problems of our common welfare to be solved by the winds of chance and the hurricanes of disaster.
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Franklin D. Roosevelt, "Second Inaugural Address" (20 January 1937), in Inaugural Addresses of the Presidents of the United States (Washington, D.C.: U.S. Government Printing Office, 1989).
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Primary source: Henry R. Luce, "The American Century," 1941.
Background information: Months before the Japanese bombing of Pearl Harbor, Time-Life Inc. founder and publisher Henry R. Luce (1898–1967) paid homage in this landmark speech to what he hailed as the "American Century," lauding the role and obligations the United States must assume as leader of the free world.
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We start into this war with huge Government debt, a vast bureaucracy and a whole generation of young people trained to look to the Government as the source of all life. The Party in power is the one which for long years has been most sympathetic to all manner of socialist doctrines and collectivist trends. The President of the United States has continually reached for more and more power, and he owes his continuation in office today largely to the coming of the war. Thus, the fear that the United States will be driven to a national socialism, as a result of cataclysmic circumstances and contrary to the free will of the American people, is an entirely justifiable fear.
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Henry R. Luce, "The American Century," Life, 17 February 1941.
(c) 1941 Time, Inc. Reprinted by permission
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Primary source: Franklin D. Roosevelt, "The Economic Bill of Rights," address to U.S. Congress, 1944.
Background information: In his message to Congress in 1944, President Roosevelt (1882–1945) urged passage of the Servicemen's Readjustment Act to extend economic and educational assistance to the returning veterans of World War II. This legislation became the basis for the "G.I. Bill of Rights."
. . . It is our duty now to begin to lay plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high the general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.
In our day these economic truths have become self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all, regardless of station, race or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of this nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every business man, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home and abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident and unemployment;
The right to a good education.
All of these rights spell security. And after the war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.
America's own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens. For unless these is security here at home there cannot be lasting peace in the world.
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Franklin D. Roosevelt, "The Economic Bill of Rights," (11 January 1944), in The Public Papers and Addresses of Franklin D. Roosevelt, ed. Samuel Rosenman (New York: Harper, 1950), 13:40-42.
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Primary source:
Veterans Sign Up for G.I. Bill Programs, photograph, 25 July 1951.
Background information: Hailed as one of the most significant pieces of legislation passed in the twentieth century, the “G.I. Bill of Rights” helped shore up the American economy by helping returning veterans launch new lives in the civilian sector. This photograph was taken at the New York regional office of the Veterans
Administration, on the last day to file papers for educational courses.
© Bettmann / CORBIS, Photo No. BEO41885.
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Primary source: Alvin H. Hansen, "A New Goal of National Policy: Full Employment," scholarly article, 1945.
Background information: The economist Alvin H. Hansen argued that the federal government, in the postwar era, needed to adopt policies to fuel consumer demand and thereby guarantee full employment in the civilian sector—an argument that led to Congressional passage of the Full Employment Act of 1945.
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. . . [T]he Murray Full Employment Bill, if enacted into law, would . . . represent a new attitude, purpose, and responsibility of the central government with respect to the problem of unemployment. Instead of palliative and ameliorating measures . . . [the bill proposes] a positive national policy with respect to the maintenance of employment, production, and national income.
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[The bill] announce[s] a determination of government to act promptly and vigorously to prevent depression and unemployment. . . . This means that the government . . . must have plans in readiness. In the language of the Murray Bill there must be prepared "such plans and programs as may be needed during the ensuing or subsequent fiscal years to help achieve full employment volume of production. . . . the rate of Federal investment and expenditure may be varied to whatever extent and in whatever manner the President may determine for the purpose of . . . assuring continuing full employment." . . .
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Alvin H. Hansen, "A New Goal of National Policy: Full Employment," The Review of Economic Statistics 27, no. 3 (1945): 102–3.
© The MIT Press © 2002 JSTOR.
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Primary source: Abbie Rowe, photograph, 1947.
Background information: At the Lincoln Memorial, President Harry Truman (1884–1972) became the first U.S. president to address the National Association for the Advancement of Colored People.
Abbie Rowe, National Park Service, Courtesy Courtesy of the Truman Presidential Museum & Library.
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Primary source: Harry Truman, Speech to NAACP, 1947.
Background information: In his speech to the National Association for the Advancement of Colored People, President Harry Truman (1884–1972) pledged his commitment to end racial discrimination through passage of more far-reaching civil-rights laws.
I am happy to be present at the closing session of the Thirty-eighth Annual Conference of the National Association for the Advancement of Colored People . . . ,
I should like to talk to you briefly about civil rights and human freedom. It is my deep conviction that we have reached a turning point in the long history of our country's efforts to guarantee a freedom and equality to all our citizens. Recent events in the United States and abroad have made us realize that it is more important today than ever before to insure that all Americans enjoy these rights.
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But we cannot be content with a civil liberties program which emphasizes only the need of protection against the possibility of tyranny by the Government.
We must keep moving forward, with new concepts of civil rights to safeguard our heritage. The extension of civil rights today means, not protection of the people against the Government, but protection of the people by the Government.
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Our immediate task is to remove the last remnants of the barriers which stand between millions of our citizens and their birthright. There is no justifiable reason for discrimination because of ancestry, or religion, or race, or color.
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This is a difficult and complex undertaking. Federal laws and administrative machineries must be improved and expanded. We must provide the government with better tools to do the job. As a first step, I appointed an Advisory Committee on Civil Rights last December. Its members, fifteen distinguished private citizens, have been surveying our civil rights difficulties and needs for several months. I am confident that the product of their work will be a sensible and vigorous program for action by all of us.
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Harry Truman, Speech to NAACP, (29 June 1947), Harry S. Truman Papers, at the Truman Presidential Museum & Library.
Courtesy of the Truman Presidential Museum & Library.
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Primary source:
Levittown, photograph, 1958.
Background information: As the first community of its kind, Levittown, New York, located 25 miles east of Manhattan on Long Island, heralded the postwar arrival of suburban America with its hundreds of acres of mass-produced housing.
Joseph Scherschel, TimePix.
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Primary source: Harry S. Truman, "Establishing the President's Committee on Equality of Treatment and Opportunity in the Armed Services," executive order, 1948.
Background information: This path-breaking executive order, issued by President Truman (1884–1972) on July 26, 1948, officially ended segregation in the U.S. Armed Forces.
WHEREAS it is essential that there be maintained in the armed services of the United States the highest standards of democracy, with equality of treatment and opportunity for all those who serve in our country's defense:
NOW THEREFORE, by virtue of the authority vested in me as President of the United States, by the Constitution and the statutes of the United States, and as Commander in Chief of the armed services, it is hereby ordered as follows:
1. It is hereby declared to be the policy of the President that there shall be equality of treatment and opportunity for all persons in the armed services without regard to race, color, religion or national origin. This policy shall be put into effect as rapidly as possible, having due regard to the time required to effectuate any necessary changes without impairing efficiency or morale.
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Harry S. Truman, "Establishing the President's Committee on Equality of Treatment and Opportunity in the Armed Services," Executive Order 9981, 26 July 1948, at http://www.trumanlibrary.org/9981a.htm.
Courtesy of the Truman Presidential Museum & Library Web site.
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Primary source: Harry S. Truman, "Annual Message to the Congress on the State of the Union," 1949.
Background information: After his reelection to the White House in 1948, President Truman (1884–1972) revived his liberal domestic legislative agenda, or the "Fair Deal," that Republicans had defeated in the previous Congress.
Mr. President, Mr. Speaker, Members of the Congress:
I am happy to report to this 81st Congress that the state of the Union is good. Our Nation is better able than ever before to meet the needs of the American people, and to give them their fair chance in the pursuit of happiness. This great Republic is foremost among the nations of the world in the search for peace.
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The American people have decided that poverty is just as wasteful and just as unnecessary as preventable disease. We have pledged our common resources to help one another in the hazards and struggles of individual life. We believe that no unfair prejudice or artificial distinction should bar any citizen of the United States of America from an education, or from good health, or from a job that he is capable of performing.
The attainment of this kind of society demands the best efforts of every citizen in every walk of life, and it imposes increasing responsibilities on the Government.
The Government must work with industry, labor, and the farmers in keeping our economy running at full speed. The Government must see that every American has a chance to obtain his fair share of our increasing abundance. These responsibilities go hand in hand.
We cannot maintain prosperity unless we have a fair distribution of opportunity and a widespread consumption of the products of our factories and farms.
Our Government has undertaken to meet these responsibilities.
We have made tremendous public investments in highways, hydroelectric power projects, soil conservation, and reclamation. We have established a system of social security. We have enacted laws protecting the rights and the welfare of our working people and the income of our farmers. These Federal policies have paid for themselves many times over. . . . Without them, our present prosperity would be impossible.
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The Employment Act of 1946 pledges the Government to use all its resources to promote maximum employment, production, and purchasing power. This means that the Government is firmly committed to protect business and the people against the dangers of recession and against the evils of inflation.
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If we want to keep our economy running in high gear, we must be sure that every group has the incentive to make its full contribution to the national welfare. At present, the working men and women of the Nation are unfairly discriminated against by a statute that abridges their rights, curtails their constructive efforts, and hampers our system of free collective bargaining. That statute is the Labor-Management Relations Act of 1947, sometimes called the Taft-Hartley Act.
That act should be repealed!
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Harry S. Truman, "Annual Message to the Congress on the State of the Union," (5 January 1949), reprinted in Public Papers of the Presidents of the United States: Harry S. Truman (Washington, DC: GPO, 1964), 1-7 at http://www.trumanlibrary.org/trumanpapers/pppus/1949/2.htm.
Courtesy of the Truman Presidential Museum & Library Web site.
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