Important Stuff!Important Stuff!

Midterms are completedMidterms are completed Apologies for the delay, which was entirely my faultApologies for the delay, which was entirely my fault Pay close attention to your TA’s discussion of what we were Pay close attention to your TA’s discussion of what we were

looking for on the IDs and essaylooking for on the IDs and essay If you missed a lot of multiple choice, you need to study your If you missed a lot of multiple choice, you need to study your

lecture and recitation notes, textbook, and Hollitz more closelylecture and recitation notes, textbook, and Hollitz more closely

Essay Two is due the week after finals:Essay Two is due the week after finals: Read and follow the hand-outRead and follow the hand-out Basic goal: To “make” history the way historians doBasic goal: To “make” history the way historians do Careful and historically informed investigation of Careful and historically informed investigation of historical historical

evidenceevidence: Primary materials: Primary materials Primary materials are to historians what geological strata are to Primary materials are to historians what geological strata are to

geologists or fossils are to paleontologistsgeologists or fossils are to paleontologistsIn all cases, the argument that best explains all the available data is In all cases, the argument that best explains all the available data is likely to be the most widely acceptedlikely to be the most widely accepted

Important Stuff!Important Stuff!

Bit of advice: Begin reading The Autobiography of Malcolm X over breakNote: Because of the FDR film, we won’t be showing The Atomic CafeStudents who had excused absences for the exam, please see me after class todayAgenda for today and this week: Review Depression, New Deal, and WWII Discuss World War III (AKA, the Cold War)

1) The Great Depression1) The Great Depression

What caused the Great What caused the Great Depression?Depression?

NOT the stock market crash, though contributedThe inequalities of wealth that had been building since the Gilded Age

Economic health increasingly dependent on mass consumption

Lacking unions or other means to increase worker wages, incomes rise only gradually while productivity soarsWith wealth concentrating in hands of top 1-2%, wage workers unable to buy enough, resulting in overproduction

Laissez-faire philosophy of Coolidge (1923-29) Ideologically refuses to use government to manage

economy for sustained growth or discourage rampant speculation

What caused the Great What caused the Great Depression?Depression?

Number One Cause: World War I As the “arsenal of democracy” in WWI, U.S. sold vast amounts

of war materiel to England and FranceAlmost all bought on credit, which they were trying to pay back throughout the 1920sCoolidge refuses to forgive this war debt because of isolationist sentiments

Versailles Treaty: Germany had to pay huge reparations to England and France

U.S. banks provided much of the capital (loans) to the GermansGermans in turn used this capital to pay off England and FranceA fragile triangle of international debt

When U.S. market crashed, bankers called in loans to Germany, which then was unable to pay England and France, who then defaulted on debt repayment to the U.S.

A Vicious Downward Spiral

The “Meaning” of the Great The “Meaning” of the Great DepressionDepression

Isolationism was an illusion League of Nations or not, Global Capitalism had now clearly linked the

U.S. to the fate of the worldLaissez-faire policies had even more disastrous consequences in a global system:

Ideologically opposed to government management of even the domestic economy, free market advocates of laissez-faire were completely unable to recognize the need to somehow manage the international economy

The old belief that success and failure was primarily a result of individual hard work, discipline, etc., became even more ridiculous

Depression throws millions of hard-working, responsible Americans out of work

People lose their homes and families through no fault of their own Can individual Americans truly control their own destinies?

Decisions made not just in New York board rooms, but offices in Berlin and London, dictate the fate of millionsThe Independent Yeoman Farmer is truly dead

2) The Promise 2) The Promise of a “New Deal”of a “New Deal”

The New DealThe New Deal

Only possible because of the mass pain and suffering of free-market capitalism’s greatest historical failure (so far) Narrow window of opportunity to experiment

with new ideas about the proper role of government and the meaning of American liberty and freedom

In many ways, a break from the past But also had roots with the more modest

reforms of the Progressive Era

What did the New Deal do?What did the New Deal do?

Historians think in terms of the First and Second New Deals: The First New Deal:

Focused primarily on basic relief of economic suffering and attempts foster economic recovery

The Second New Deal:Much more ambitious, FDR’s attempt to permanently alter the American political economyGovernment to manage the economy for stable growth and to guarantee all Americans a modicum of economic security

The First New DealThe First New Deal

Agricultural Adjustment Act Federal payments to farmers to take acres out of production,

raise fewer pigs, etc. Goal: Limit over-production

Civilian Conservation Corps Employ idle young men in public works projects Goal: Give people jobs and pump money into economy

Federal Depository Insurance Corporation Guarantee private savings in banks Goal: Regain public faith in safety of banks

National Industrial Recovery Act Federal regulation of minimum wages, maximum hours Promises workers right to unionize Public Works Administration give people federal jobs

Did the First New Deal work?Did the First New Deal work?

Yes and no Did not do succeed in getting the nation out of the

Great DepressionBy 1935, few signs of significant economic recovery

But did take the edge off the worst sufferingGave Americans “hope in hard times”Americans believed FDR was on their side, and he wins the lasting devotion of millions

FDR’s overwhelming popularity sweeps in a democratic majority in the Congress

Many of these more radical than FDR and push for bigger changes

Radical ThreatsRadical Threats

After five years of depression, many Americans begin to listen to would-be leaders much more radical than FDR

Consider what happened in many other capitalist nations

Germany: Hitler’s hyper-Germany: Hitler’s hyper-patriotic, nationalistic, patriotic, nationalistic, and militaristic Nazi and militaristic Nazi fascismfascism

Italy: Mussolini’s hyper-patriotic, nationalistic, and militaristic fascism

Japan: The Japan: The military’s military’s hyper-hyper-patriotic, patriotic, nationalistic, nationalistic, and and militaristic militaristic Japanese-Japanese-style style fascismfascism

USSR: Stalin’s anti-fascist, USSR: Stalin’s anti-fascist, anti-capitalist, state-planned anti-capitalist, state-planned economy which suffered few economy which suffered few ill-effects from the Great ill-effects from the Great DepressionDepression

•Few realized at the time, Few realized at the time, though, that Stalin had though, that Stalin had created the most brutal of created the most brutal of police states that would kill police states that would kill millions of his own peoplemillions of his own people

The distinctly un-militaristic, un-nationalistic, and un-fascistic (though none the less patriotic) FDR, with his Scotty Fala and an unknown young victim of polio

Radical threats at homeRadical threats at home

Remember: The U.S. evinced definite strains of Remember: The U.S. evinced definite strains of fascistic ideas in the 1920sfascistic ideas in the 1920s 100% Americanism and radical nationalism100% Americanism and radical nationalism Intolerance for a diversity of ideasIntolerance for a diversity of ideas Suppression of civil libertiesSuppression of civil liberties Red Scare: Fascism was anti-communistRed Scare: Fascism was anti-communist Eugenics: Controlled human breeding for pure Anglo-Eugenics: Controlled human breeding for pure Anglo-

Saxon bloodSaxon blood The KKK—White Sheets become Brown Shirts?The KKK—White Sheets become Brown Shirts? One notable exception: Lacked militarismOne notable exception: Lacked militarism

Home-grown Home-grown American American radicals:radicals: Francis Francis

TownsendTownsend LA doctor who LA doctor who

called for called for generous federal generous federal monthly monthly payments to the payments to the elderly to take elderly to take them out of the them out of the labor poollabor pool

Home-grown Home-grown American radicals:American radicals: Father Charles Father Charles

CoughlinCoughlin Detroit radio priest Detroit radio priest

who called for the who called for the nationalization of nationalization of major American major American industriesindustries

Deeply anti-Semitic, Deeply anti-Semitic, blamed economic blamed economic troubles on a troubles on a conspiracy of Jewish conspiracy of Jewish bankers (Adolf Hitler bankers (Adolf Hitler anyone?)anyone?)

Home Grown Home Grown American RadicalsAmerican Radicals Huey LongHuey Long Demagogic Louisiana Demagogic Louisiana

Senator who wanted Senator who wanted to “soak the rich”to “soak the rich”

Confiscate large Confiscate large private fortunes, levy a private fortunes, levy a steep progressive steep progressive income taxincome tax

Promised government Promised government would provide every would provide every average American average American family with a minimum family with a minimum household income of household income of $2,500$2,500

FDR’s New Political PhilosophyFDR’s New Political Philosophy

In this climate of world fascism and home-grown radicalism, FDR’s “radical” Second New Deal was clearly very moderate—a middle way between total state control and laissez-fair; the amazing flexibility of American democracyAvoids fascism and communismRedefines the meaning of “liberalism”:

The simple old days when Americans could be truly independent and self-sufficient were gone

Most Americans could no longer guarantee themselves and their families a modicum of security

Left to its own devices, it appeared that free-market instabilities often led to fascistic or other dictatorial attempts to provide fearful people security in an insecure world

Therefore, it must be the task of democratically elected governments to guarantee some basic level of economic safety and security—if not, democracy itself would likely perish

The Second New DealThe Second New Deal

Not about relief or recovery, but rather about creating a secure new political economyCyclic unemployment was a permanent and inevitable feature of modern industrial capitalism Therefore, must have federal mechanisms to

help the unemployed Government to be the employer of last resort

The Second New DealThe Second New Deal

1935 Emergency Relief Appropriation Allocated an unheard of sum—4 billion dollars—to

provide federal jobs for the unemployed

(Robert) Wagner National Labor Relations Act Guaranteed the right of labor to unionize and required

industry to bargain fairly with recognized union representatives

Logic: Empower workers to get a fair deal from industry so pay, benefits, etc., are more economically viable

AVOIDS having the government directly regulate wages, hours, etc.

The Second New DealThe Second New Deal

Social Security Required all 48 states to establish some

system of unemployment insurance Provided old age pensions

Americans over 62 would be guaranteed a (very modest) pensionSelf-funded by a payroll tax: workers contribute to their own future retirement

FDR believed this would make it impossible for any future politician to get rid of Social Security

What politician would be foolish enough to deny American seniors the benefits they themselves had paid for?

What did FDR and the New Deal What did FDR and the New Deal do?do?

Created modern liberalism: A central purpose of government is to provide its citizens with economic security

For the first time, federal government less interested in preserving the rights of capitalists and corporations than in guaranteeing the security of the mass of average American people

Did so without destroying the creativity and wealth-generating power of industrial capitalism (indeed, post-war period sees the biggest economic boom in American history)

Nevertheless, some of the wealthy elites resented the New Deal and thereafter constantly fought to roll it back and reestablish elite control

Created an economic regulatory system and social safety net that—so far—may have prevented another economic downturn as severe as the Great Depression

What did FDR and the New Deal What did FDR and the New Deal do?do?

Created the New Deal Democratic political coalition that would dominate until the 1980s

Lower class, middle class, farmers, labor, African Americans, urban north and “Solid South”

Greatly increased the size and power of the federal government

Likewise, also increased taxation, potentially unfair or illogical regulations, etc.

New Deal liberalism justified bigger government as a necessity to balance the power of big business, manage the economy, and guarantee every American a measure of economic security

Big Question: Would big government nonetheless eventually come to limit the freedom of Americans more than protecting those freedoms?

What did FDR and the New Deal What did FDR and the New Deal NOTNOT do? do?

Did not result in significant long-term redistribution of wealthDid not create a system of substantial state ownership of industry, railroads, etc.Did not end the Great Depression

In some cases, did more harm than good Although large federal spending (Keynesianism) did

spur modest economic growth, the economy was still weak by 1940

Needed MASSIVE federal spending, which came only with the start of WWII

3) World War II: The Big Picture3) World War II: The Big Picture

Took the U.S. out of the depression and left it the most powerful economic force on the globe

By 1945, U.S. sole intact global industrial powerhouseGermany, France, England, Japan, etc., will be eager customers for U.S. goods for a decade or longerBegins an extraordinary era of American economic prosperity

Clearly establishes the U.S. as a major player in global power politics

Unlike after WWI, the U.S. does not retreat into isolationism By 1949 U.S. is engaged in WWIII with the Soviet Union, leading to

a seemingly permanent war-time footing

Centrality of the federal government in funding big science and industry is widely accepted

Manhattan Project demonstrated seeming necessity for federal role in the science of mass destruction

Creation of a Military-Industrial Complex

Questions?Questions?