Fighting the New Deal All Over Again

Ever since Time ran its cover of Barack Obama as FDR, pundits have been chattering about the idea of a "new New Deal." But as the idea of the New Deal comes back in style, so does opposition to the vision of activist government, everywhere from the pages of magazines such as National Review (which is once more running anti-Roosevelt essays) to the Republican opposition to the stimulus package. Backpedaling from the culture wars, today's conservatives are hoping to rescue their movement from the debacle of the Bush presidency by presenting themselves as the enemies of big-government dogma. Rep. Paul Ryan of Wisconsin put it to the Washington Post, by resisting Obama's plan to help the economy by boosting government spending, "We're beginning to find our voice."

But although they're trying to make it seem like a new direction, these contemporary conservatives are simply going back to their movement's roots. Although today it is a commonplace that modern conservatism is a reaction against the radicalism of the 1960s, a movement of pro-lifers and opponents of gay marriage, the real origins of today's conservative movement can be found in the backlash against the economic liberalism of the depression decade and afterwards.

And what's more, although today's conservatives speak the language of populism, in the past businessmen were always at the forefront of the fight against the New Deal. In the 1930s, business leaders campaigned against many of the leading pieces of New Deal legislation. Wall Street brokerages resisted financial regulations. Executives from DuPont organized the American Liberty League, a group that claimed to welcome "every citizen, man or woman, in the shop, in the field, in the mill, in the counting house, in the business world, in the home or in any walk of life" -- as long as they were opposed to the "ravenous madness" of the New Deal. But in reality, the League was devoted to the principle that "business, which bears the responsibility for the paychecks of private employment, has little voice in government," and most of its funding came from a tiny circle of top executives. Some even felt that the League didn't go far enough. "I want to mobilize a group of business leaders in this country who will start shouting from the house-tops and the cellars and every other place where they can obtain a hearing...that we are approaching disaster," said one Southern California utility executive, who proposed to create a network of "militant alarmists" in the business world to protest the New Deal.

In 1936, these politicized executives backed FDR's opponent Alf Landon, the governor of Kansas, in his bid against the Democratic incumbent. Believing that (as one campaign memo put it) "the government of the United States has been placed by a dumb, unthinking populace in the hands of notorious incompetents," the Industrial Division of the Republican Party even distributed special pay envelopes to employers that contained a warning that the new Social Security Act would result in lower paychecks.

The scare tactics failed, and Roosevelt won by a landslide. But the people who fought the New Deal during the 1930s never gave up. Later in the twentieth century, these business conservatives helped bankroll think tanks and anti-union campaigns, as well as political candidates such as Barry Goldwater. They built the infrastructure of today's conservative politics and helped to shift the intellectual climate of the country against labor unions and government programs toward an unthinking celebration of the free market. Intellectuals such as Friedrich Hayek benefited from the financial largesse of DuPont Company executives, think tanks such as the American Enterprise Institute grew with the contributions of members of the "remnant" of anti-New Deal executives, and even Ronald Reagan learned about economics while working at General Electric during the 1950s, when the company embraced market ideology in order to combat its unions. The free-market businessmen saw the New Left and antiwar activists as threats to the power of business, and they were therefore able to make common cause with cultural conservatives in the 1970s -- a project made easy by leaders such as Jerry Falwell, whose newspaper denounced unions and whose early books quoted enthusiasts for capitalism like Milton Friedman.

Ultimately, many politicians from both parties accepted these old anti-New Deal ideas. And when Ronald Reagan was elected, tax cuts, deregulation, and an acceptance of economic inequality became the new orthodoxy -- and remain so in some ways even now, despite the role of such policies in creating the current economic mess. Which is why -- to paraphrase Karl Marx -- it seems not so much tragic as it does farcical to see today's congressional conservatives trying to revive their old faiths.

In the 1930s, the opponents of the New Deal failed. Everyone knew that the blind confidence in laissez-faire had helped to drive the country into the depression, and the business conservatives and their political allies were never able to regain the support they'd lost with the stock market crash. Today, there's no popular uprising on the scale of the early 1930s. It remains to be seen how serious the Obama administration is about progressive economic change; his cabinet seems largely sympathetic to the business lobby and to free-market beliefs, and the rhetoric of bipartisanship doesn't seem likely to yield broad transformations. There's a conservative network and a business lobby far stronger than anything that existed during the 1930s, one sign of which is that business groups are split on the stimulus package -- the Chamber of Commerce, for example, says it's happy to support some version of the bill. Still, if there's any real movement toward a "new New Deal" -- for example, if the Employee Free Choice Act ever gets off the ground, or if there's a push toward true universal health care -- it seems likely that the businessmen will be back in force, doing what they've done ever since the 1930s: trying to build the conservative movement by crusading against the New Deal.