No. 165: For the Survival of Democracy: The New Deal, a New Era of Sobriety

• Alonzo L. Hamby: For the Survival of Democracy: Franklin Roosevelt and the World Crisis of the 1930s; Free Press; 2004; 492 pp; $30 hardcover

HILLSDALE, MICH.—The latest New Deal synthesis is For the Survival of Democracy by veteran historian Alonzo Hamby of Ohio University. What makes Hamby’s research design different is that he describes the development of Franklin Roosevelt and the New Deal in an international context. Specifically, Hamby weaves the American narrative with events in Britain and Germany in the 1930s.

Hamby is at his best developing the characters of Churchill, Baldwin, Hitler —and of course those New Dealers that surrounded Roosevelt. His brief biographies help make the book readable and interesting.

In interpretation, Hamby’s book is a bit of a puzzle. He does not fully accept the laudable accounts of Roosevelt that have dominated American historiography; but neither does he reject them. He concedes that the New Deal programs failed to improve the American economy, but he finds Roosevelt to be a capable president. “Reduced to paper,” Hamby says, “the Roosevelt record was hardly impressive… But Roosevelt was impressive. His charisma, rhetorical talents, and dynamism made the New Deal more than the sum of its parts.” Such separating of the president from his record is strange, but it is a step up from exalting both Roosevelt and his record (which is more consistent, but wrong on two counts, instead of just one).

Part of the problem here may be Hamby’s weakness in economic analysis. “Whatever else the [Roosevelt] administration had done,” Hamby says, “however many benefits it had delivered to Americans, it had not ended the Depression.” When Hamby says, “however many benefits it had delivered to Americans, it had not ended the Depression” he seems surprised — as though New Deal programs clearly delivered “benefits” but did not inflict costs as it “delivered” the benefits.

Henry Hazlitt, a New York Times columnist during the 1930s, repeatedly reminded Americans that whenever a New Deal program conferred cash upon a lucky recipient it had to secure the cash from an unlucky taxpayer. Thus, all jobs created by the WPA, CCC, or PWA took capital from consumers that could otherwise have been used to build factories or to buy sweaters, radios, or paint for the house.

Thus, when Hamby asks, “Did not governments engage in a social good by giving employment to those who needed it?” the answer is not “yes,” as he implies, but maybe not because cash that was given to employ, say, street pavers in Ohio, lost the chance to employ radio makers in New Jersey or textile workers in South Carolina. In other words, jobs were merely transferred from one group to another.

What this means in terms of analyzing policy is that when Hamby writes in one paragraph that the federal subsidy to veterans in 1935 “pumped about $2 billion into [the] economy” maybe he should let the reader see in the next paragraph that a tax increase that same year raised tax rates on top incomes to 79 percent (four years earlier, the top rate had been only 24 percent). The two events need to be discussed together because they function together. Hamby discusses the programs, but rarely bothers with the taxes that transferred the money out of taxpayers’ pockets to pay for them.

The task of those who would defend Roosevelt and the New Deal is to address these transfer payments with all of their ramifications. When Hamby concludes, “the WPA would endure until 1943, doing far more good than harm,” he should explain why Americans were allegedly better off with the WPA but also with higher income taxes and higher excise taxes on cigarettes, tires, bank checks, movie tickets, and telephone calls than they would have been with no WPA and lower income and excise taxes.

According to the League of Nations World Economic Survey 1938/39, the recovery rates from the Great Depression were much better in France and Britain than in the United States. In 1938, France and Britain combined had only 14.7 percent unemployment and the United States was barely under 20 percent. In that international context, Roosevelt’s New Deal seems to be less than, not more than, the sum of its parts.

Nonetheless, For the Survival of Democracy is a step forward because Hamby, a mainstream historian, is willing to criticize much of the New Deal and some of Roosevelt’s actions and motives.

Burton Folsom, Jr. is Charles Kline professor of history and management at Hillsdale College in Michigan.