today, while reading a well-written and thoughtful article about 2 books that regard FDR and his new deal from different points of view, something very shocking occurred to me. up until today, i had always regarded the new deal with mixed feelings. i always thought the new deal itself was an excellent set of programs that proved very succesful. at the same time i understood that the new deal programs are what opened the door, via precedent, to the erosion of the individual sovereignty upon which i believe a society should be built in favor of greater governmental control and responsibility.
undoubtedly, many new deal programs were very succesful, and it seems that a defensible position could be taken that the new deal helped pull much of america out of the depression and positioned us excellently for world war 2. i would probably argue against those points myself, but i can certainly see that point of view, and in any case, that's a discussion of book-length not blog-length. however, i think an oft-overlooked, yet important, effect of these programs is the social and economic canyon it created between america's (newly formed) lower-middle class and its poor.
before the new deal, the "bottom end" of the american labor market was relatively free and fluid. without a floor on wages or restriction on supply and demand, workers could enter the labor market at any price and find a job by undercutting their competition. of course, this meant that the equilibrium was such that many of the workers in low-end jobs (miners, sharecroppers, etc.) were living at or very near to the poverty line. as the depression set in, and the demand for american goods and labor fell sharply, the number of workers unable to "scrape together a living" even when employed grew immensely...
enter the new deal-- a set of programs and strict central regulation designed to raise american workers to a higher standard of living. among the many facets of these programs were a purposeful restriction on the supply of food and clothing in order to drive up prices, a floor on wages, and monopoly bargaining power of unions. all of these things (and more) created an environment that ensured low-end workers would sustain a "reasonable" standard of living as long as they were employed.
the downside of these programs, is that it created a substantial gulf between the employed and unemployed. with prices higher, the elimination (via minimum wage)of workers who existed in the gray areas surrounding "subsistence level," and the elimination of the individual's right to bargain himself into the workforce, the unemployed now faced a huge barrier to entry into the job market that didn't exist before. essentially, it created an extreme distinction between the "haves" and "have nots" that didn't exist before. of course, this was great for the people who managed to retain or obtain a job, but it sucked really badly for the people that lost or were unable to get a job.
a (not to be glossed over, just too big for discussion in this post) aside is the extent to which this newly formed "underclass" was composed of african-americans. many of the unions held strict racist policies at the time, and much of the below-price-floor labor was composed of minorities. thus the new policies ensured that their existing jobs would either be erased or monopolized by racist unions, providing a practically insurmountable obstacle for many (mostly southern) african-americans.
i would argue that this newly formed abyss between the "lower middle-class" and the "poor" ushered in a vicious cycle from which our society has never recovered and by which we continue to spiral further into the self-defeating algorithm of socialism. with a large chunk of people now unable to support themselves even at a basic biological level, a social structure was formed in which the "haves" are now responsible (be it morally or out of fear for their own lives) for the survival of the "have nots." this creates a gigantic need for government to enforce a social conscience of some sort, which perpetuates the growth of the government and sets the two social castes into adversarial positions that exist within two seperate, yet related (via only government decree) markets. the impoverished market obviously could never sustain itself, so it drains the "actual" market constantly in order to survive and perhaps even grow.
put another way, not only do i now see the new deal as setting the precedent for disorganized socialism in america, but i now see it as the set of events which gave birth to the existing conditions, which now practically require an extreme amount of limitation on individual rights in order to maintain the entire structure.
-ALW
