In current political discourse, there is talk of a ‘Green Deal’ or ‘Green New Deal’ in which the government heavily invests in environmentally friendly jobs and technologies. The language of a ‘Green Deal’ is a conscious reference to President Franklin D. Roosevelt’s (FDR’s) New Deal programme in 1930s America, which is considered synonymous with assertive left-wing action. The term ‘A Green New Deal’ originated from a 2008 report published by the British left-wing think tank, the New Economics Foundation. This document linked twenty-first-century emergencies, the 2008 financial crisis, climate change and increasing energy prices, to the Great Depression of the 1930s. The report argues that 2008’s moment of crisis is an opportunity for ‘oversight and coordination’ from government, the energy sector and private savings vehicles towards radical economic reform and a low energy future.
The sheer amount of legislation passed by FDR’s administration in its first hundred days, is remembered as bringing about decisive state spending in support of some of America’s poorest people. The New Deal is often considered as a pivotal political moment in America’s history, having shifted mainstream political discourse leftward. It set a precedent for the government to make economic interventions during domestic (and even foreign) crises, providing basic securities for its citizens, such as pensions. This, at least, is how the New Deal is popularly remembered but how does a Green Deal align with, or depart from, the intentions, achievements, and deficits of its predecessor?
In comparison to European capital cities, Washington DC in the 1920s would have seemed relatively sluggish. The US government lacked a professionalised civil service, and rarely intervened in the economy. After years of economic growth, the stock market crashed in 1929, and this triggered a long period of economic downturn, known as the Great Depression, which lasted from 1929 until the late 1930s. America was particularly afflicted by this. With more than twenty per cent of American banks going under, a quarter of Americans unemployed and many working on reduced wages, then president, Herbert Hoover, was viewed as incapable of ending the crisis. Upon receiving the Democratic Party’s nomination to run for president, FDR vaguely spoke of a ‘New Deal’ for the American people and of using any means to bring about economic recovery. In this speech, he famously stated, ‘the only thing we have to fear is fear itself’ and pledged to restore confidence. As with the Green Deal’s concern for future survival in the face of climate disaster, FDR’s Deal was put in place against the background of an existential crisis prompted by a rise in support for fascism and communism. FDR’s optimism appealed to many fearing that the Depression was undermining confidence in capitalist democracy.
While the solutions offered were unclear at first, the American public seemed to like what they heard, and FDR became president in 1933 with huge majorities in Congress and the Senate. The New Deal’s intentions were less specific than today’s Green Deal but did possess leadership and a decisive mandate. FDR himself came across as reassuringly confident. In contrast to the sternness of the outgoing Hoover, FDR communicated as a charismatic ‘warm apple pie’ kind of president who liked to ‘shoot the breeze’ with regular folk and academics alike.
In contrast to Green Deal ambitions, The New Deal, as it developed, was never one thing carefully prepared in advance. As Anthony J. Badger observes in his FDR: The First Hundred Days (2008):
Relief for the unemployed, the protection of labor standards, farm price supports, and public works spending were all part of the Hundred Days. But so were measures designed to slash government spending, foster business-government cooperation, and increase the tax burden through regressive excise taxes. It was by no means inevitable at the end of the Hundred Days that the former would be the shape of the New Deal future while the latter became redundant.
FDR’s priorities were to respond quickly and flexibly to a crisis – not everything was successful, but what seemed effective was usually kept. With a majority in both houses of government, a specific political atmosphere receptive to trying new ideas, and a public willing to put faith in him, he was able to pass an unusual volume of new legislation. FDR brought in people, often with conflicting views, to act; although they were broadly progressive liberals, there were those in favour of greater state regulations and interventions, like Rexford Tugwell, Harold Ickes, and Frances Perkins (the first woman to serve in a US presidential cabinet), economic conservatives like Henry Morgenthau and Lewis Douglas, and right of centre progressives like Raymond Moley (who eventually became an ardent critic of the New Deal). This environment contributed towards creativity, disorganisation, contradiction, compromise, and discussions being brought before FDR as the ultimate decision maker. In the long term, the New Deal broadly revolved around the three Rs (with different individuals involved prioritising some more than others): relief for the unemployed, recovery of the economy, and reform of the financial system to prevent future depressions.
The New Deal is remembered as a pivotal moment in the direction of American politics. As might be assumed, this has led to disagreements as to its legacy. Generally, centre to centre-left historians identify it with state action, and a kinder form of democratic government which partially intervenes where private interests fail to look after American citizens. The New Deal organised the US government, preparing the nation for the logistical challenges of entry into the Second World War. In resolving the Depression, it had potentially stopped a violent revolution or political takeover by an extremist alternative, as had happened in Russia. In Arthur M. Schlesinger, Jr.’s seminal history, The Coming of the New Deal (1958), the New Deal is understood to have been a collection of necessary and creative responses to the Depression. It seems to be from this positive interpretation of the New Deal that Green Dealers primarily take inspiration.
For the American far left, the New Deal was a wasted moment to permanently break down the power of private businesses. It was an unusual opportunity in exposing the problems of capitalism through visible unemployment. FDR’s majorities in Congress and the Senate were a one-time chance to nationalise the banks and other parts of the economy. While government actions may have done some good, these are thought to have been minimal concessions from the rich, with FDR essentially being a conservative president who enabled them to escape the wrath of ordinary people, and then to resume their unfair societal control. The programme was also discriminatory in excluding non-whites and women from social securities. For many left-leaning environmental activists today, this interpretation of the New Deal might make it seem less historically compatible with their Green Deal desires. Extinction Rebellion’s activists for instance, are united by a minimum ambition of changing capitalism, with more radical supporters wishing to disassemble it entirely.
Those in favour of a smaller government and more deregulated economy in the US have been equally critical of the New Deal’s memory. For pro-Friedman and Hayek monetary theorists, the New Deal was perhaps, the American mistake of the 20th century. FDR’s New Deal policies were confused, ineffective and damaged the American economy, as well as the democratic structure irreparably. Jim Powell’s, FDR’s Folly (2003), encapsulates many of the arguments of this stance, suggesting that the president, as well as his staff, used populist politics and state money to advance their dictatorial ambitions. This prolonged conditions of unemployment and curtailed liberties which free markets ostensibly uphold. Contemporarily, Hayekians would consider a Green Deal, at least by the New Economics Foundation’s definition, an unacceptable governmental interference in the economy. For them, responses to climate change should be, as the Depression should have been, left to businesses and private individuals.
The historical debate surrounding the New Deal reflects its legacy in the expectations of twentieth and twenty-first-century governments. During the 2008 financial crisis, then British prime minister, Gordon Brown–in part influenced by the history of New Deal–sought to make a decisive state intervention by bailing out the banks. Yet again, with the recovery from COVID-19, high unemployment, and a climate crisis, there are opportunities for resolute action. With a large majority in parliament, the current prime minister, Boris Johnson, could seize this moment to act. This seems appropriate as in 2021, Britain hosts the G7 Summit (in June) and United Nations Climate Change Conference (in November).
In comparing a Green Deal to the New Deal, it must be acknowledged that while there is usually more open mindedness to change during a crisis, lasting political reform is still difficult. The New Deal’s architects were ambitious but also capable of compromise – something that many scientists and environmentalists believe we cannot afford on climate change. The New Dealers also needed a strong and popular leader with the determination to carry out and communicate their programme. Additionally, their original intentions did not always work out as planned. So much of what the New Deal is now associated with (state spending) was largely argued in retrospect. FDR was no Keynesian comfortable with the government borrowing money to invest – something that a modern government seriously intent on implementing a Green Deal would likely have to embrace.
The New Deal was a complicated political process, and its memory is no different. Today’s Green Dealers, however, should take one idealistic lesson from it: if there are people willing, long-lasting change is possible.
Very interesting article I thoroughly enjoyed!