The New Deal: The National Level

Ellis W. Hawley

AS DEPICTED BY MOST AMERICAN HISTORIANS IN THE 1950s, THE "mixed economy" of the United States was a superlative blend of two worlds, a system that combined rational direction, organizational security, and stable growth with a large measure of democratic decision-making, individual liberty, and local and private initiative. While bringing competitive excesses and harmful fluctuations under administrative control, it had also developed a system of "countervailing powers," a "corporate conscience," and a vigorous "inter-industry competition," all of which had enabled it to retain the dynamism and safeguards associated with free markets and competitive enterprise. And though it was still far from perfect, its amazing productivity had all but solved the quantitative problems of production and distribution, thus providing the material base for a new type of qualitative and cultural reform. ¹ Looking back, moreover, these writers credited Franklin D. Roosevelt and his New Deal with much of the historical development responsible for this happy state of affairs. By modernizing and defending the American political system, they argued, and by using it to stabilize, democratize, and humanize an unruly corporate capitalism, the pragmatic New Dealers had provided the basic framework within which the nation's liberal-democratic ideals could be preserved and realized. ²

More recently, as views of the economy have changed, this older image of the New Deal has become somewhat tarnished. The central development in recent American history, according to a new group of institutionalist scholars, has been the rise of bureaucratic industrialism, not the further advance of liberal democracy; and the chief impetus to reform,

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