From 1932 to 1981

The people of the United States are, obviously, at another turning point in their economic and social history. This one is probably just as important as was that last major turning point which began with the stock market collapse of October 1929 and turned into the new order inaugurated by Franklin Delano Roosevelt's "New Deal."

This turning point is like that earlier one in several respects. We know that it marks the end of an era which had run its course. We know that it marks a beginning.

But neither we, the ordinary people, nor the men presiding over the transition, President Reagan and his advisers, can know what the shape of the new order will be. Nor can we possibly know at this time how successful it may be. The seas ahead are uncharted.

It was like back in 1932. Franklin Roosevelt ran for the presidency that year on a conservative platform. He promised to balance the budget. He promised to cut government spending. He promised to restore "law and order."

There was nothing in the campaign which sketched out the enormous changes in the American system which emerged out of Mr. Roosevelt's first "hundred days," or during his first remarkable administration.But those changes transformed the system. They were not sketched out in the campaign because they did not exist in the thinking and planning of Mr. Roosevelt himself or of his campaign advisers. The "New Deal" wasn't planned. It emerged.

What emerged served the purposes of the American people remarkably well for a long period of time, just as had the pre-Roosevelt system done well, for a long time. But both ran out of steam. Pre-Roosevelt capitalism built the underlying fabric of the modern industrial America. It built the railways, the cities, the power plants, the electricity grid.It provided the military power which turned the war tide in Europe and gave the Allies the victory in 1918. It got the United States ready for modern times.

But between 1918 and 1932 the system of capitalism failed the country and its people. It did not know how to keep itself going. It failed to realize that the industrial fabric it built could be kept working usefully and productively only if the public had sustained buying power. The system had built the factories and the tools which reduced the need for labor. Cotton pickers, harvesting machines, mass production techniques all contributed to rising unemployment. Rising unemployment without income support systems meant reduced buying power. One by one the factories closed down.

When Mr. Roosevelt entered the White House in March 1932 the country was flat on its economic back, and in a state of mental and emotional despair. He revived it with precisely the same kind of splendid optimism which Ronald Reagan has brought to his similar task. Mr. Roosevelt did not know where he was going, but he could revive hope by his own infectious confidence that something could and would be done.

Economists still argue over whether the Roosevelt measures of that first term were the wisest. Some of them were repudiated quickly. One of the most spectacular was the NRA (National Recovery Administration). It issued Blue Eagles to factories which agreed to conform with codes devised in Washington which were a disguised bypass of the antitrust laws. It flourished briefly as a mighty propaganda operation. It was outlawed by the Supreme Court.Few lamented its passing.

The New Deal was a wild spree in extemporization and experiment. Mr. Roosevelt would try anything which might help. The mere volume of his experiments gave people fresh hope and fresh effort. Gradually, though very gradually, the economy began to pick up.

But all systems tend to run their natural course and need reform and regeneration. The New Deal corrected some of the most glaring weaknesses of pre-Roosevelt American-style capitalism, but in its final or Lyndon Johnson phase it had run itself into the ground, and the couintry into economic stagnation and rampant inflation. The welfarestate system had gone too far.

Public awareness of the bankruptcy of the old order made possible Mr. Roosevelt's successes with Congress during his first 100 days. Public awareness of the bankruptcy of the old order is right now making Ronald Reagan the master of the Congress. Hope as in 1933 has been revived. Americans are on their way into a new order. It will not repudiate all of the old any more than the Roosevelt new order repudiated all of the old. But there will be experiment and change. The re must be. It is high time.

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