America’s response to the crisis of 1929-1933 was the “New Deal” by President Franklin Delano Roosevelt (1882-1945), whom the Americans still regard as the most significant politician in their history. Because of Roosevelt, who was elected to the presidency four times since 1932, the United States radically changed. That’s why research paper on the topic about the new deal is quite popular in higher institutions.
The economic crisis, which exacerbated all capitalist contradictions, led to the growth of a deep political crisis in the USA. In this situation, in November 1932, the next presidential election took place. Victory went to a representative of the Democratic Party, Franklin Roosevelt, who had the thematic program called “New Deal”.
Despite the contradictions, conflicts and stagnation characteristic of the development of the United States in the XX century, the “New Deal” allowed American capitalism to gain a second wind.
As part of the “new course” proclaimed by the president of the Democratic Party, the integration of the labor movement into the American establishment (the established order) has accelerated. The American bourgeoisie, having put forward its leader, showed the ability to maneuver and search for development reserves within the capitalist system, which was saved in just a few days (moreover, within a constitutional, democratic framework). The New Deal was the most radical wave of reforms in US history. New principles of organizing the life of society subsequently became widespread in other countries.
The main elements of New Deal are:
- providing support to the financial and banking system and industrial and commercial enterprises with the help of large loans and subsidies;
- stimulating private investment with tax breaks;
- stabilization of falling prices through the devaluation of the dollar and the assumption of increasing inflation trends;
- forced cartelising of industrial enterprises;
- state regulation of the level of industrial production;
- the introduction of sectoral “fair competition codes”, which determined a unified price policy, fixed the size of production, distributed sales markets, and recommended wages.
Roosevelt as a New Deal initiator.
A “new deal” policy in the United States was developed under the leadership of Franklin Delano Roosevelt, who won the election in 1932. He frankly declared his mission: “I want to avoid a revolution.” In reality, he launched a large-scale modernization of Western industrial civilization.
Following Jefferson and the traditions of humanism, Roosevelt placed the rights of Americans to life, liberty, and the pursuit of happiness above the right to freely dispose of property. Alien to the idea of abolishing classes and class differences, Roosevelt believed in the possibility of rallying them around the nation-state with the help of slogans of fighting minority privileges and serving the interests of the majority by the government. The outline of his course had its pros and cons, but his ruling is considered the best in the history of America.
Roosevelt’s new course reforms, carried out in Keynesian spirit, ended the era of the classical liberal economy in the history of the USA. Until F. Roosevelt, the USA was a traditional country of liberalism, where the free market reigned supreme, and the state acted as a “night watchman” (this phrase is usually used to denote the minimum role of the state in the economy). Roosevelt was able to draw the power of the modern state to the salvation of capitalism.
The most radical new deal programs met coolly with business and the US Congress and soon were canceled by the Supreme Court. However, this did not prevent Roosevelt from achieving his success.
Roosevelt’s attitude toward monopolies was highly controversial but, as a rule, critical.
During the presidential campaign of 1932, Roosevelt unequivocally placed the responsibility for the economic crisis on the monopolies, the title of which was “economic oligarchy”, which concentrated in its hands more than half of the production capacity of the nation, approved the highest prices that were inaccessible to the majority of people. The result of this was overproduction, stopping of enterprises, unemployment, and poverty. But in 1932, Roosevelt thought a lot about real anti-monopoly measures, which were designed to save individualism, competition, the right of every American but not just the elite for private property.
Success or failure of social and economic reforms in the USA.
Roosevelt was a great and talented leader that’s why his reforms had a positive reflection in the situation of the USA. The most significant result of the changes was the introduction of the beginnings of social legislation in the country: pensions, benefits for the unemployed, organization of public works, youth policy. According to the law of 1935, entrepreneurs were obliged to recognize trade union organizations and conclude a collective agreement with them. The state also assumed some regulatory functions in economic and financial management. Questions of social failure were solved.
Economic measures included the creation of a National Administration for the Recovery of Industry (NIRA). In accordance with the decision of NIRA, the “Fair Competition Code” was adopted, according to which monopoly prices were established, the conditions of the trade credit, the volume of products were determined, and the sales markets were distributed. The main purpose of the Code was to prohibit selling goods below the established prices. That reform causes some argumentative discussions.
And how successful was the program of assistance to farmers! An Agricultural Regulation Administration was established. This organization regulated the prices of agricultural products, set the volume of production, and supported the reduction of farm sown areas.
Talking about the agricultural sector, funds were allocated for research and education of farmers, technical assistance and investment were encouraged, electrification of rural areas was carried out, and state loans were granted to farmers. As a result of these measures, the growth of agriculture in the years of the “new deal” was 5% per year.
In conclusion, we’d like to mention that the new course of Roosevelt in the United States is the economic policy that the American President Franklin Roosevelt pursued to overcome the Great Depression. All changes were carried out in order to stabilize the economic situation and return it to normal.