How Roosevelt Saved Capitalism: The 74th Versus the 112th Congress

Jan 10, 2011David B. Woolner

Roosevelt historian David Woolner shines a light on today’s issues with lessons from the past.

Amid much fanfare, the 112th Congress convened for the first time last week. In his opening address, the new Speaker of the House, Republican John Boehner, urged his colleagues to move forward "humble in our demeanor, steady in our principles, and dedicated to proving worthy of the trust and confidence that has been placed in us." Reaching out to both sides of the aisle, he also observed that if the newly elected members of the House "brace ourselves to do our duty, and to do what we say we are going to do, there is no telling what together we can accomplish for the good of this great and honorable nation."

In the wake of the first midterm elections of the Obama presidency, it will be interesting to compare the 112th Congress's legislative accomplishments to those of the Congress that FDR inherited in the wake of the 1934 midterm elections. Like today, the 74th Congress convened at a time when the nation was in the midst of a continuing economic crisis and faced numerous threats abroad. Unlike today, however, the prevailing political philosophy of the 74th Congress -- and a good share of the public -- was vastly different. In 1935, thanks in large part to FDR's rhetorical skills and leadership, the people's faith in government as the protector of the common good was at one of its highest points in our history. United by a sense of common purpose and steadfast in the belief that government should act as the primary guarantor of social and economic justice, the 74th Congress gave us such landmark legislation as the Social Security Act, which not only provided old-age pensions and support for children and the handicapped, but also the established our country's first nationwide system of unemployment insurance. The same Congress also passed the National Labor Relations Act, which sought to stabilize labor relations and bolster unions' security. It guaranteed the right of workers to join unions and created the National Labor Relations Board, a three-member federal review board responsible for determining which unions would represent workers in specific industries or factories and for guarding against unfair labor practices by employers, employees, or unions themselves.

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The 74th Congress also passed many other important bills. It passed the Soil Conservation Act, which encouraged farmers to adopt more environmentally friendly practices in an effort to save one of nation's most precious natural resources -- its soil. The Rural Electrification Act brought the revolutionary benefits of electricity to the 9 out of ten farmers who did not have it when FDR took office. The Commodities Exchange Act established federal regulation of all commodities and futures trading activities and required all options to be traded on organized exchanges. The Public Utility Act facilitated the regulation of electric utilities. The Flood Control Act of 1936 committed the federal government to the protection of people and property on over 100 million acres of land through the US Army Corps of Engineers. And it passed the 1935 and 1936 neutrality laws, as well as five other significant pieces of legislation.

As even this brief summary of the work of the 74th Congress shows, under FDR's leadership these and other New Deal measures dramatically expanded the scope of the federal government's responsibilities in American life. Where Washington had previously been only a distant regulator of economic and social affairs, it was now the government's responsibility to maintain economic prosperity, mitigate the worst effects of unfettered capitalism, spread industrial and agricultural development to impoverished regions of the nation, guarantee workers' right to choose their unions, protect the bargaining rights of those unions, and conserve and develop the nation's vast natural and artistic resources.

Contrary to some critics' views, the New Deal was not intended to radically change the foundations of American capitalism. Rather, it revised that system in order to save it. Moreover, it did so not by abandoning government, but by strengthening it. For as FDR and the 74th Congress well understood, they had inherited a nation that was dominated by the forces of wealth and privilege. As a consequence, and as FDR once remarked, "[f]or too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor -- other people's lives." "Against economic tyranny such as this," he went on, "the American citizen could appeal only to the organized power of government."

A good share of the 112th Congress, particularly under the Republican leadership in the House, appears determined to take the country in the opposite direction. They would prefer to let market forces, rather than the "organized power of government," determine the social and economic fate of the nation. It is too early to tell whether their determination to reduce its role will succeed or whether the impact of these conservative forces on future generations of Americans will be as large as that of the 74th Congress. Over the course of its two-year tenure, that Congress passed a number of legislative initiatives that still benefit us today.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute.

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