The New Deal as the Beginning of a New Era in American History - Coursework Example

Introduction New Deal is considered as one of important steps in the economic history of US as it embarked on a new era of economic reforms in the country. New deal is actually a series of economic programs implemented by US in the early 1930s as a result of the great depression faced by the country at that time. The overall program was based on the so called relief, recovery and reform strategy wherein the government attempted to first provide the relief to the people affected by the persistent economic slump and than subsequently took efforts to initiate the recovery and the reforms in the economy in order to bring economy back on track. What is also significant to note about this whole initiative is the fact that it resulted into the strong economic recovery and a complete and new change in the way America society tend to work and behave. The intervention by the government in the economy allowed the economy to pick up and vital economic variables such as growth, unemployment and inflation started to show positive signs. It also brought forward a new political alignment in the country as the Democratic Party started to emerge as the sign of liberal ideas and newly empowered trade unions and minorities. (Edsforth, 2000) Though the New Deal left many important political, social, as well as economical imprints on the American society however, question remains as to whether the New Deal has been really successful or whether its success was overrated by the Historians. This paper will therefore attempt to discuss and argue as to whether the New Deal was really a success or it was overrated by the Historians. The Great Depression Before discussing the New deal and whether historians have overrated its success, it is important that a general discussion shall be provided for the events which lead up to the New Deal. From economics point of view there are many reasons as to why the great depression happened however, the overall impact of the great depression has on the economy of US and its society have been great. During this era gross domestic product of the country greatly declined and there was a sharp increase in the unemployment level. High unemployment levels therefore created the general unrest within the American society and people were looking for change which can actually bring overall relief to the general masses of the society. (Weatherford & Sergeyev, 2000). What is also significant to note that before the great depression there was also a general political complacency in the country. Conservatives were ruling the country and they maintained a very strong stance of having minimum government intervention into the markets. Minimum interventions by the government therefore resulted into the over-hyped activity in the markets and the stock market became a place for great speculative activity. It was the greater level of speculative activity in stock markets which actually resulted into the sharp decline in the stock markets which subsequently caused the economy to slide further. Different sectors of the economy such as construction, automobiles and steel production went down and resultantly the new American dream started to shake owing to the continues slide in the economy. The continued decline in the economy also shook the beliefs of the Americans in the ability of the free market economy as the source of the economic prosperity in the society. The dream of the new era failed to deliver the results however, it was unexpected that the great depression followed which was completely unpredictable. It is also important to note that the era before the great depression was an era when there were greater income inequalities in the US economy. The rich were taxed lower whereas the overall redistribution mechanism was not sufficient enough to ensure that the all the citizens were adequately covered and the State was basically doing its part in completing its basic responsibilities. (Manza, 2000) Apart from that the minimal involvement of government allowed the firms to basically tame the labor unions thus reducing the impact and significance of the middle and labor within the economy. This disparity in the economy therefore resulted into changes in the very social structure of the society as a whole. The end of new era in America also resulted into the stock market crash in the America and the investors lost greatly as a result of this decline. What followed was the great depression and the systematic decline in the vital economic indicators of the economy. The New Deal- A general introduction America went through economic crisis in the first half of 20th century and the great depression lasted for almost a decade. New Deal was the series of economic programs and reforms undertaken by US government between the periods of 1933 to 1935. The New Deal was undertaken under the first term of Franklin Roosevelt with an aim to provide relief to the poor segment of the society as well as initiating the recovery for the economy in general. New Deal was also an effort to reform the financial system of the country in order to prevent the re-initiation of the episodes like Great Depression. (Kennedy, 1999) It is also important to note that the economic reforms under New Deal were undertaken in 1933 and the second wave of economic reforms was undertaken between 1934 to 1936. The first New Deal was aimed at dealing with banks, companies, railroads as well as the farming to provide stimulus to the particular sectors of the economy. The second new deal was more comprehensive and initiated important initiatives such as Social Security Act, Works Progress Administration as well as Wagner Act. These new set of regulations ensured a new era in the American history as the overall economic progress started to pick up and new changes started to make lasting changes on the different segments of the society. (Venn, 1998) It is also important to note that the new deal was an unprecedented increase in the spending of the Federal government in order to stimulate the economy and bring in the necessary changes which were required to bring more stability and recovery in the economy. It was also considered as the national response from America towards the great depression and how the political structure of the country handled the overall situation. Over the period of time as the benefits of the new deal started to pass on to the ordinary Americans, New Deal was started to be considered as something which changed the history of US and its ordinary citizens. Due to income re-distribution policies, a new working class emerged in US thus improving the standards of living of masses. This resulted into the improvements in the overall social aspects of living also as with the improvements in the life standards people were able to better educate themselves and take advantage of the different opportunities in most efficient manner. Views held by Historians The deep changes which new deal brought to the American society resulted into the changes which created deep economic as well as social changes. The main reasons as to why the historians were mainly impressed with the new deal were the fact that there was a general belief that the new deal has been able to bring in the required level of relief to the masses. Probably the biggest success of the new deal was its ability to provide the relief to the masses. As discussed above that the new deal was focused on the relief, recovery and reforms therefore new deal was successful in fulfilling its promise on providing the relief to the masses. What historians significantly argue in favor of the fact that the government adapted much larger role in the management of the economy? Greater role of the government into the economy and its management therefore created a balance between the markets and the economy. Apart from that the Federal government and the various State governments assumed more responsibility in providing relief to the aged and needy of the society thus increasing the overall role and importance of the government in the economy. Another stream of thought on the fruits of the new deal for the US economy is based on the argument that though new deal was successful in bringing in the change in the economy however, it failed to provide the permanent and lasting changes. This argument therefore is based on the assumption that the new deal only resulted into the partial recovery only and therefore it cannot be entirely termed as the success. Apart from that it is also argued that some of the recovery in the economy was the direct result of the economic policies adapted during the New Era age. Though the new era begun under the leadership of the Hoover however, its legacy was lost due to great depression. Some of the policy initiatives which were taken under this regime however, proved more fruitful in brining out the results which started to manifest during the era of New deal. Thus the overall success of the New deal also was the partial result of the steps taken under Hoover administration. Another important argument in favor of new deal is rooted in the fact that new deal further consolidated the role of government into the economy. It was therefore perceived that the markets, on their own, cannot bring in the equity and social justice in the economy and it is therefore important the government should intervene in the economy in order to achieve the balance and social justice. By introducing systematic controls over the financial institutions and other organizations, new deal basically further consolidated the role of government into the economy. Another important attack on the legacy of new deal is based on the assumption that FDR basically attempted to innovate the policies of Hoover administration. This stream of thinking suggest that the new deal was something which Hoover was about to bring and therefore it was just the continuum of what was already going to happen in the US economy. This is because the overall recovery in the economy was really slow and the new deal really could not provide an immediate relief to the masses at once. The last argument which is given in the context of new deal is the assumption that the new deal and it effects shall be viewed in much larger context. It is argued that the new deal was successful in saving the American democracy, its constitutionalism and above all it saved the American brand of capitalism by bringing in the realignment between the markets and the government. Above all, this stream of thinking suggest that the new deal brought the best out of America as a country and made it a country which bravely faced some of the hardest times in its overall history as a country. Conclusion The New Deal was considered as a beginning of a new era in the history of America as it outline some of the most important steps which America took as a country to face its great depression. It comprises of the series of economic reform programs undertaken by American government in a bid to overcome the worse economic situation of its time. New deal is therefore considered as a beginning of an era in US history which actually resulted into the deep changes into the American society and increased the role of government in managing and intervening in the affairs of the market. It is however, critical to note that there are mixed responses from the historians regarding the overall success and failure of the new deal as something which brought positive changes in the economy of US. Some argue that it was successful in bringing in the desired results very quickly whereas some still believe that the New deal was not completely successful in bringing in the desired results. In any sense, it may however, be difficult to conclude that the success of new deal was overrated by the historians. It has both the positives as well as the negatives therefore it seems that the historical context of the new deal is quite balanced. Bibliography 1. Edsforth, R. (2000). The new deal americas response to the great depression. New York: Wiley-Blackwell. 2. Kennedy, D. (1999). Freedom from Fear : The American People in Depression and War. New York: Oxford University Press Inc. 3. Manza, J. (2000). Political Sociological Models of the U.S. New Deal. Annual Review of Sociology , 26, 297-322. 4. Venn, F. (1998). The New Deal. Edinburgh: Edinburgh University Press. 5. Weatherford, M. S., & Sergeyev, B. (2000). Thinking about Economic Interests: Class and Recession in the New Deal. Political Behavior , 22 (4), 311-339. Read More