The New Deal Illusion

Historian Gabriel Kolko reminds us that Herbert Hoover was no advocate of laissez-faire:

Libertarians argued years later that Hoover’s economics were statist, and that he belonged in the continuum of government and business collaboration that began around the turn of the century. I must agree with them.

Hoover’s initiatives did not produce economic recovery, but served as the groundwork for various policies laid out in Franklin D. Roosevelt’s “New Deal.” As Secretary of Commerce under the preceding Republican presidents, he had been particularly active in creating trade associations in hundreds of industries, and these associations were to become the backbone of the National Recovery Administration, the first New Deal.

When the Democrats won in 1933 they favored business and government cooperation. Moley was joined by a group, including Hugh Johnson, who had served on Wilson’s War Industries Board, Chamber of Commerce representatives, assorted trade association lawyers, bankers, and academics. Many people helped formulate the first phase of the New Deal. They were certainly not radicals nor did they want to be. The trade association movement was the heart of the first New Deal, but the Supreme Court outlawed the NRA in May 1935 as unconstitutional.

An article well worth your time.