In order to assess the long term consequences of the New Deal, it will be useful to divide those consequences into four broad categories. Firstly, the consequences for American society. It will be the argument of this essay that the New Deal had very little lasting effect on American society, although it did inadvertently set in motion several movements which produced radical change in later decades. Secondly, the consequences for American political institutions.
In this essay, it will be argued that the changes which the New Deal made in this area were confirmed by the Second World War, and that without the War there is no reason to believe that there would have been any lasting consequences of the New Deal for the polity of the United States. Thirdly, the consequences for the American economy. Again, the role of the Second World War must be emphasised here, since it was the War which led to recovery in the American economy and not the New Deal. Therefore, long term consequences of the New Deal for the economy are hard to find.
Fourthly and finally, the consequences for the American party system. It is the intention of this essay to show that it is here that the New Deal had the most far-reaching effect and in this area where long term consequences are easiest to discern. There were several marked social problems in the United States at the beginning of the New Deal period. The most obvious was poverty, which was endemic due to the Depression. However, there were several other problems. With hindsight, it is apparent that the issue of race relations was soon to become an important political arena.
The New Deal was certainly advantageous to many blacks, especially in the cities of the north. Even in the south, where local administration of much of the federal aid meant that white people were treated preferentially, young black males claimed the lions share of the aid available. The fact that there was no specific answer to the problem of racism and racial discrimination did not seem to concern most black people, who switched from supporting the Republicans to supporting Roosevelt’s Democrats.
Although it is quite difficult to trace any long term consequences of the New Deal for race relations, it is certainly the case that black people had more access to government, especially through the First Lady, than they had enjoyed before. The New Deal was by no means an embryonic Civil Rights movement, but it might be possible to trace some of the issues involved to the way Roosevelt and the progressive Democrats of the New Deal period treated the blacks.
The effects of the New Deal on political institutions in the United States are often characterised as a swing from the States to the Federal government and from the legislature to the executive. Certainly, New Deal legislation saw a large increase in the role of Federal government in the lives of citizens. For example, the Communications Act (1934) saw the Federal government undertake to regulate communication companies, a role which had previously fallen to the States, and the National Labour Relations Act (1935) ensured that the Federal government was able to assert control over another area which had been the reserve of State governments.
The extent to which Federal government had expanded its role at the expense of the States can be seen by the fact that direct transfers of money from the Federal government to local government in 1940 was thirty times the amount in 1927, while transfers from States to local government had only tripled. Again, the fact that the power of the executive increased during the period of the New Deal cannot be doubted. As Badger observes, “in the early days of the New Deal Congress willingly delegated vast, unencumbered authority to the president” in a way which had not previously occurred.
The amount of legislation which Roosevelt was able to pass through Congress against the better judgement of many Congressmen shows his own personal power during the period. The real question, however, is whether this shift in power was sustained. As far as the relations of the legislature to the executive are concerned, it seems clear that very soon Congress began to reassert its rights, with an alliance of conservative Democrats and Republicans defeating several later pieces of New Deal legislation, much to Roosevelt’s personal pique.
Furthermore, the increase in the power of the executive seems to have been linked very closely linked to Roosevelt himself. Roosevelt was very popular in the country, as can be demonstrated by the fact that he was able to retain the Presidency for four terms in violation of the convention which was later to be enshrined in the Constitution as the 22nd Amendment. Arguably, the only long term consequence for relations between the legislature and the executive was that certain measures were put in place to prevent the executive from becoming over powerful in future, such as the amendment just mentioned.
In the arena of Federal and State relations, there is no doubt that a precedent was set for the Federal government taking an increased role in the government of the States. The size of the Federal Bureaucracy increased in order to cope with the large number of new tasks which were being performed at the federal level, and many of these tasks had become so popular by the 1950s that they were politically sacrosanct.
The Social Securities Act (1935), for example, required a substantial increase in the size and power of the Federal bureaucracy, and had become so entrenched by the 1950s that there was no politically feasible way to remove it. However, it is possible to exaggerate the difference made by the New Deal in this area. Many of the measures introduced by the New Deal were still administered by the States, and the States were often given considerable powers of discretion as to how they administered the Federal legislation.
For example, in the Southern states State governments had enough power to ensure that more Federal aid went to rural areas than to cities, and to whites rather than blacks. In the economic sphere, the New Deal enjoyed success in the short term, unemployment falling thanks to schemes like the Civilian Conservation Corps (CCC) and Public Works Administration (PWA). The banks were supported by the Banking Act (1935). By 1937, production in the US was restored to its pre-Depression 1929 level.
However, it is much more difficult to see that there were any long term consequences of the New Deal for the American economy. The recovery engendered by early acts in the New Deal programme was clearly already in trouble by the later 1930s, and between September 1937 and June 1938 industrial output fell by 33 per cent. In fact, it was not until the Second World War that the American economy did recover fully, and this appears to have had very little to do with the New Deal legislation and much more to do with the fact that wartime required increased production and therefore increased employment.
Theda Skocpol had argued that the New Deal legislation did have another very important long term consequence for American economics. Skocpol argues that the New Deal entenched in the American consciousness a dislike of Keynesian-style economics, largely due to the fact that New Deal legislation was perceived as having failed to restore the American economy to its pre-depression strength. Skocpol traces this problem to the half-hearted nature the New Deal and the lack of commitment to social Keynesianism among progressive reformers.
However, this appears to be a confusion of causes and effects, since it is apparent that the reason the New Deal was not more radical was that it faced a lack of support for progressive ideas amongst Americans in general and Congressmen in particular. It appears that it was American hostility to interventionist government that made the New Deal less successful, and not the lack of success by the New Deal which engendered distrust of fiscal policy in Americans.
The most important long term effect of the New Deal was the change wrought in the American party system. By the end of the New Deal period, the Democratic Party had been split into two wings. There was a conservative, southern based group, who were against the New Deal, and a more liberal and progressive northern based group, who enthusiastically supported the New Deal. This division was of course not intended by Roosevelt. However, it was brought about by his actions.
Roosevelt had pledged to leave behind him, when he left office, a Democratic Party that was committed to the progressive agenda. His drives to bring this about alienated many people within the Party, especially those in the South, who had always been more conservative. This division of the Democratic Party still exists today, and it is noticeable that voting in Congress is often not along party lines but along the lines of geography.
Despite the differences of opinion that the New Deal brought to the fore within the Democratic Party, it did commit that party to a more progressive stance than had previously been the case, and made certain that the Democrats would always be the more liberal of the two main parties in the US. This was achieved primarily by a shift in the voting patterns of many people. Because they benefited more from the New Deal reforms, cities in the north became strongholds of Democratic support.
Furthermore, the Democrats earned for themselves the support of most of the black community, who had previously tended to be loyal Republican voters. The long term results of this have already been discussed above. Along with these solid gains in support, the Democratic Party also gained the position of being perceived as the natural party of government, and for a long time was able to dominate Congress. Badger asserts that the New Deal “fashioned the Democratic Party into the new national majority party” and that “the Democratic Party has never entirely relinquished this status”.
It may be the case that with the recent Republican victories in Presidential and Congressional elections this phase has come to an end, but that remains to be seen. In conclusion, then, it appears that there were very few long term consequences of the New Deal. It is difficult to distinguish whether certain aspects of the modern American polity – such as the 22nd Ammendment, or the increased role of Federal government – stem from the New Deal legislation itself or from other causes, perhaps the personality of Roosevelt himself or the advent of the Second World War.
In fact, the only long term consequence which can be traced directly to the New Deal is party realignment and the creation of what Badger calls a “schizophrenic Democratic Party”, split between its more progressive northern members and more conservative southern members. Perhaps the most interesting thing about the consequences of the New Deal is that the Democratic Party survived the era as the dominant party in American politics.