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Copyright © 1995 The Johns Hopkins University Press. All rights
reserved. This  work may be used, with this header included,
for noncommercial purposes within a  subscribed institution.
No copies of this work may be distributed electronically outside
of the subscribed institution, in whole or in part, without express
written permission from the JHU Press. Reviews in American History
23.4 (1995) 710-715

FROM NEW DEAL TO NEW LIBERALISM

William R. Brock

Alan Brinkley. The End of Reform: New Deal Liberalism in Recession
and War. New York:
Knopf, 1995. x 271 pp. Archival sources, notes, and index. $27.50.


This is an important addition to New Deal historiography, but,
as with many other academic monographs, the subtitle tells more
than the title. The book's primary purpose is not to examine
the end of reform but to explain how and why American liberalism
was transformed. In that it brings together much that is already
known and advances no startling new interpretations, it can be
described as a synthesis; but it is synthesis of a high order.
No other book covers the ground with such mastery and at numerous
points a new insight or citation illuminates what has hitherto
been obscure. Seventy-two archival sources and eighty-one pages
of notes (several of them condensed historiographical essays)
demonstrate the width and depth of his learning. Even more telling
is the good judgment with which the material is handled.

The New Deal gave birth to a new species of liberalism. In Roosevelt's
words, quoted by Brinkley, its leading characteristic was "a
changed concept of the duty and responsibility of government
toward economic life." Progressive moralism slipped into the
background, city bosses were flattered rather than challenged,
all forms of populism were distrusted as antiintellectual and
irrational, racial questions were avoided, gender was not yet
an issue, and so far as the New Dealers were concerned anyone
could imbibe as much alcohol as they wished. What the New Deal
liberals did have in overflowing measure was intellectual energy
harnessed to the conviction that society could be reconstructed
on just, rational, and efficient lines, and that the intelligent
use of political power would make general welfare more than an
empty phrase. To these liberals of the New Deal everything seemed
possible after the election of 1936; then came recession to show
that it was not. Worse followed with the ill- fated attempt to
reform the Supreme Court, the loss of the Executive Reorganization
Bill, and the resurgence of conservative and frequently virulent
opposition. In the next five years appropriations for the Works
Progress Administration were cut and cut again until it expired,
other New Deal innovations were dropped or rendered ineffective,
and the National Resources Planning Board -- repository for so
many liberal hopes -- was [End Page 710] killed. During the war
industrialists won praise but mismanagement in the wartime agencies
discredited government direction of the economy. Faced by these
setbacks and operating in a cold climate liberals so modified
their own attitudes and aims that Brinkley can write with authority
of a "new liberalism" emerging during the years of disillusion
and war, and maintain that it rather than the New Deal was the
parent of liberalism as it is known today.

The new liberalism was less adventurous than the old and not
merely because intellects grew weary. In the heady days of the
early New Deal, liberals had assumed that capitalism would remain
but could be transformed; new liberals recognized that in all
essentials it would remain the same. Despite a few attempts at
resuscitation the ideas that had inspired the NRA were dead.
Big business might still be unpopular, but political antimonopoly
faded away. Facing a future in which corporate power would survive
and probably grow stronger, liberals shifted their emphasis from
regulation to fiscal management, from disciplining producers
to protecting consumers, from emergency measures of relief to
a permanent and expanding welfare system. They dropped the idea
that the economy was mature and looked for growth, putting profits
into private pockets with the proviso that it must also provide
full employment. Victory of a sort came with Truman's triumph
in 1948 but the Fair Deal was separated by an intellectual gulf
from the New Deal.

Brinkley's introduction and epilogue provide a stimulating overview
of this decisive stage in the history of American liberalism.
The ten chapters that make up the body of the book provide massive
substance to support his generalizations, but close argument
and much detail should not deter readers. His style is fluent,
lucid, readable, and devoid of pretentious jargon. Also the text
is enlivened by perceptive pen portraits of leading personalties.


It is for the most part an insiders' story. The greatest insider,
FDR himself, is a towering figure but remains for most of the
time in the background. In the foreground are the people who
generated ideas, shaped policies, and worked out the details
-- sometimes as rivals and usually competing to convince the
President that their solution was correct. Only in a chapter
on organized labor does Brinkley travel far from Washington.
The most frequently quoted external comments are from sources
that liberal insiders would have read -- the New Republic, The
Nation, and I. F. Stone -- and from economists sympathetic to
the administration. Brinkley is not the man to start theorizing
about the autonomy of the State, but whatever the ultimate force
behind policy the measures that ensued were devised by people
in government and much of the time behind closed doors. When
the New Deal was at high noon Congress often first learned what
was proposed when fully drafted bills were presented by members
briefed by the administration insiders. After 1937 Congress [End
Page 711] demanded a greater share in policy making, but it was
still among the insiders that critical battles were fought and
won. Even petty and personal rivalries might have big results.


Congress features in the story but usually seen through administration
eyes, and more attention might have been given to critics who
were neither bigoted nor ignorant. The hearings of congressional
committees were not used as a source though it was in them that
liberals, keenly questioned, gave fullest expression to their
views. Although most committees included one or more rabid anti-New
Dealers there was much serious criticism of the bills under consideration
by Senators and Representatives who knew that the clock could
not be turned back.

The inside battle of most significance for the future was between
budget-balancers and deficit- spenders with Morgenthau and Marriner
Eccles as the principal gladiators. Other scholars have made
the story familiar but Brinkley sets it more firmly in the general
context of a quest for new policies after 1937. He agrees that
earlier writers erred in diagnosing the influence of Keynes;
that came later, rationalizing what had been done and presenting
it as a model for future fiscal management. Other issues coming
to the fore during these years are also deftly handled. He deals
sensitively with the apparent success but real frustration of
antimonopoly in the Temporary National Economic Committee. He
would appear to accept Marion Clawson's verdict on the National
Resources Planning Board (New Deal Planning, 1981), giving it
high marks for generating ideas but a low score on most aspects
of long-range planning. It was possible to identify a bridge
that ought to be erected or a dam to be constructed, or to write
useful reports on specific problems, but the information and
techniques available made useful forecasts of social needs impracticable.
For instance (as Brinkley notes), official demographic forecasts
were so wide of the mark that any plans based upon them were
certain to go wildly astray. However he does emphasize the importance
of the Board's 1942 Report on Social Security, Employment, and
Planning; not for its immediate impact, which was negligible,
but because it set the agenda for future liberal aspirations.
An excellent chapter deals with the emergence of full employment
as a key liberal aim after the war with Mordecai Ezekiel and
Alvin Hansen as the leading theorists.

When so much is given it may be ungracious to ask for more, but
the omission of controversy and change in social security is
surprising. He might have been expected to steer a well-judged
course between Carolyn Weaver's picture of a troubled road to
welfare prodigality (The Crisis in Social Security, 1982) and
Jeremy Cates's attack on the injustice of fiscal conservatism
(Insuring Inequality, 1983). The Act of 1935 was indeed a historic
landmark but not a point at which one could stand still. Some
opposition was predictable [End Page 712] and easily discounted,
but many with practical experience or theoretical knowledge of
social welfare were critical. Most of them would have opted for
a national system in which the states would act as agents with
limited administrative discretion and were unhappy with a program
that left the states free to choose between two different plans
for unemployment insurance and gave them primary responsibility
for deciding the eligibility of "unemployables" for relief and
fixing its level. Nor were they content with the patchy performance
of the Works Progress Administration in providing work for "employables."
In 1938 William Haber, who would have major responsibility for
the 1942 report, wrote that effective social security could be
achieved only "under federal leadership through a long-term program
that includes insurances, work projects, and general relief."
Another sensitive point was the way in which old age pensions
were tied to individual contributions. This adopted the principles
of private insurance and specifically denied a national obligation
to support those unable to support themselves in old age. Also,
with budget- balancers still in control, the Social Security
Board was required to maintain a large reserve fund in order
to prevent calls upon the general revenue from taxation. Abraham
Epstein, an expert whose advice had been rejected, pulled no
punches: the wealthy were relieved from their obligations under
the old poor law, the purchasing power of poor consumers was
not increased, and the Act redistributed not wealth but poverty.
1

In 1939 amendments to the act, presented as technical improvements
and agreed to without much controversy, had radical implications.
The requirement to keep a reserve fund disappeared and a more
flexible way of assessing the level of old age pensions was adopted.
In effect national responsibility was accepted and the crucial
question changed from "What has been contributed" to "What is
needed to maintain an adequate standard of life." Meanwhile the
Social Security Board had not been idle. By persuasion and pressure
it had brought about a considerable degree of uniformity in state
legislation, and had recruited an expert staff trained to identify
need and recommend remedies. With the notable exception of Health
Insurance little would now halt the onward march of the welfare
state.

Administrative problems might also have been discussed more fully.
Many years later Wilbur J. Cohen recalled that one reason why
the New Deal policies were not more radical and comprehensive
was because the President was deeply concerned by human limitations
in handling new problems and programs (The Roosevelt New Deal,
1986), and by 1936 the administrative means threatened to defeat
the political ends. The committee set up by Roosevelt under the
chairmanship of Louis Brownlow revealed a situation that defied
all the principles of good management. "The Executive Branch
of the Government," it declared, "has grown without plan or design
like the [End Page 713] barns, shacks, silos, tool sheds, and
garages of an old farm." Its plan to reorganize the federal government
was christened by Barry Karl "the Third New Deal" acknowledging
thereby the dubious existence of a second and implying that its
rejection in 1938 marked an end to all deals. Modified proposals
passed in 1939 amounted to minor repairs rather than reconstruction,
as the Hoover commission discovered in 1949. In a brief survey
Brinkley seems to assume, like the liberals of the day, that
as the Brownlow committee had said it all the only course was
to wait until common sense prevailed. 2

There was more to it than that. The report was compiled by experts
in city government not by political philosophers; perhaps it
was all the better for that, but they raised questions about
the character of American government that could not be answered
by simple rules for municipal management. So far as there was
a theory, it rested upon the naive idea that democratic aspirations
would best be served by concentrating all decision making in
the White House; but the American federal and constitutional
democracy had already evolved other ways in which the public
interest could be represented. Argument focused on the committee's
proposal to abolish the independent regulatory commissions and
transfer their rule-making and executive functions to the appropriate
departments. It was true that the commissions offended against
what were believed to be basic constitutional principles, mixing
legislative, executive, and judicial powers, responsible to no
higher authority, and forming the nucleus of "a headless fourth
branch of government." The committee's logic was clear: rule-making
and policy must be subject to presidential control. No proposal
aroused more criticism. James Landis, an eminent New Deal lawyer
and a very effective former head of the Securities and Exchange
Commission, wrote a whole book to refute the committee (The Administrative
Process, 1938), arguing that a modern state required an administrative
branch that was not under direct political control. Congress
created a commission and defined its purpose and powers; thereafter
the job was for experts, not political appointees. The commissions
were an American innovation and a good one; they had the confidence
of the public precisely because they were not under political
direction. Landis won the argument and the controversy demonstrated
the inadequacy of monolithic patterns for complex modern societies.


In his final sentence Brinkley suggests that "the New Deal's
retreat from reform in its waning years is among the sources
of American liberalism's present travails." The generalization
is fully sustained by all the arguments that precede it, but
another source of present travails was the failure to create
a convincing theory for the liberal State.

William Ranulf Brock, a Fellow of Selwyn College, Cambridge,
England, is the author of Welfare, Democracy, and The New Deal
(1988) and is at present preparing a book on concepts of public
responsibility from 1865 to 1940.
>--- Original Message ---
>From: Michael Perelman <michael@xxxxxxxxxxxxxxxxx>
>To: pen-l@xxxxxxxxxxxxxxxxxxx
>Date: 3/31/02 9:07:49 AM
>

>There were two lines in the New Deal.  The corporatists were
not dominant
>at first -- the Thurman Arnold, trust-busting line, was.  The
idea was
>that corporate power caused the Depression by keeping prices
high and
>curtailing output.
>
>On Sun, Mar 31, 2002 at 02:29:55PM +0000, Justin Schwartz wrote:
>>
>> Actually the old New Deal (pre 1937) was opposed to competition
and very
>> much in favor of corporativist planning. The New Dealers were
very impressed
>> by the successes of the WWI War economy and the apparant successes
of the
>> USSR in those days in avoiding the ravages of the Great Depression,
and if
>> you read the histories of the period, they utterly rejected
the invisible
>
>--
>Michael Perelman
>Economics Department
>California State University
>Chico, CA 95929
>
>Tel. 530-898-5321
>E-Mail michael@xxxxxxxxxxxxxxxxx
>
>