New Deal
뉴딜
The series of economic, social and political reforms carried out from 1933 by Franklin D. Roosevelt's administration in response to the Great Depression. The federal government increased spending and intervened directly to bring relief to the unemployed, recovery to the economy and reform to finance: a bank holiday and deposit insurance, the suspension of the gold standard, controls over industry and agriculture, mass public works, a guaranteed right to organise, and Social Security pensions and unemployment insurance. Whether it transformed American capitalism or rescued it remains disputed.
In depth
Roosevelt first used the phrase "New Deal" in accepting the Democratic presidential nomination in 1932. He attributed the Depression to inherent market instability and inadequate aggregate demand and argued that stabilising the economy required massive federal intervention; that year he defeated the incumbent Hoover in a landslide.
The First New Deal, from the "first hundred days" after March 1933 until 1935, focused on the "3 R's": relief for the unemployed and the poor, recovery of the economy and reform of the financial system. The Emergency Banking Act and the Banking Act of 1933 created the Federal Deposit Insurance Corporation (FDIC), and the Securities and Exchange Commission came to police the stock market. The National Recovery Administration (NRA) let industries draw up "codes of fair competition", and the Agricultural Adjustment Administration (AAA) raised farm incomes by paying farmers to cut production. A quarter of the workforce was unemployed when Roosevelt took office; the Civilian Conservation Corps (CCC) put young men to work on government land, and the Tennessee Valley Authority (TVA) developed electricity and the economy of the Tennessee basin.
After the First New Deal unemployment still exceeded 20 percent in 1935. The Second New Deal of 1935–38 concentrated on job creation and on the condition of the elderly, workers and the poor. The Works Progress Administration (WPA) built bridges, libraries and parks, invested in the arts and employed more than 8.5 million people. The National Labor Relations Act (Wagner Act) guaranteed the right to form unions, and the Social Security Act created old-age pensions, benefits for the disabled and for poor children, and unemployment insurance. The Fair Labor Standards Act banned child labour and set a 40-hour week and a national minimum wage.
The New Deal remade American politics. The Democratic Party's base became a "New Deal coalition" of labour unions, urban workers, minorities including African Americans, white Southerners and intellectuals, which dominated presidential elections into the 1960s. Its benefits were uneven: the AAA helped landowners, mostly white, while pushing out Black tenant farmers and sharecroppers, African Americans worked in segregated CCC units, and federal housing policy required segregation.
Whether the New Deal ended the Depression is still debated. The economy turned down again in 1937–38, and most historians accept that full employment came only after the United States entered the Second World War. Conservatives and revisionist economists charge that it infringed free enterprise and prolonged the Depression. New Left historians fault it for rescuing capitalism when the chance to nationalise banking, the railways and other industries was at hand. Historians generally agree that apart from building up labour unions the New Deal did not substantially alter the distribution of power within American capitalism.