Rexford Tugwell and the New Deal

By Bernard Sternsher | Go to book overview

10. The Ideological Split in the New Deal

I

There were two main schools of economic thought in the New Deal. Tugwell was a follower of the collectivistic philosophy of "concentration and control." This philosophy, resting on the gospel of efficiency, contemplated the emergence of large productive units as the logical result of invincible technological advance. Tugwell called for protection of the public interest amid the industrial giants through "social management." His aim was protection of the public interest in the broadest sense--fair shares for all in an expanding, stable economy.

The Progressive atomists, or trustbusters, also saw hugeness resulting from technological advance, but they had a different way of protecting the public interest. They demanded the breaking up of the industrial Goliaths and the restoration of the classical competitive model of many, small, equal enterprises. They did not wish to change the institutional arrangements of the capitalist system. Their objective was to make the capitalists behave--through reforms in the fields of banking and securities as well as through trustbusting.

In addition, the Progressives' program for recovery emphasized the restoration of business confidence, which required orthodoxy in the handling of the banking system and in fiscal management. Thus, Progressivism permitted increased spending--including expenditures for relief, welfare, and public works--while also providing for progressive taxation as the source of funds. And the Progressives accepted social security, which, Tugwell later remarked, by assuring everyone a minimum, served as the "necessary floor" for laissez faire.1 In other words, Progressivism did not basically change the game. It enacted some new rules and, by means of minimal guarantees, sought to give everyone a chance to play.

Embodying these two schools of thought, the New Deal exhibited a split personality. Tugwell attributed this dichotomy to Roosevelt's refusal to choose between "concentration and control" and enforced atomization. The San Francisco Commonwealth Club campaign speech of 1932 outlined both policies. Similarly, in the last years of the prewar period, after 1935, Roosevelt sought to discover a positive control of prices without violating the trustbusting ideology. But he did not dare to let go of either. This desire to reconcile opposites, Tugwell recalled, was an impossible challenge and the source of costly confusion.2

Placing the President in the center of affairs in this manner may

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