It seems like a stupid question, doesn't it? Everyone I've ever met who claims to be a libertarian believes the New Deal was the epitome of U.S. socialism and a disaster in practice. Though many self-proclaimed libertarians defend Franklin Roosevelt in his capacity as commander in chief during World War II, they usually regard the New Deal as American collectivism at its worst — despite the fact that the war itself saw far more nationalization of industry and assaults on the free market than what occurred during the New Deal.
For pro-war "libertarians," the reasons for this are obvious. National defense is a legitimate function of government; social welfare is not. U.S. entry into World War II was defensive and resulted in liberating millions; the New Deal was an abject failure modeled after socialist countries in Europe. The Great War defended freedom; the New Deal attacked it. During the New Deal FDR was a Pinko; World War II transformed him into the Leader of the Free World.
Simple, isn't it?
I've often wondered how "libertarians" who cheer on Bush's War on Terrorism would have reacted to the crisis of the Stock Market Crash and Great Depression. It seems to me that if you're going to trust the state to protect you from terrorists, why not trust it to fix the economy?
I know a few folks who were alive then and remember it. From what they say, and what I've read in the history books, the Great Depression was certainly a terrible time for many Americans.
Can you imagine it? The economy going along, growing strong, quite robustly, through the booming 1920s only to quickly and steadily decline, taking with it the fortunes and dreams of millions of Americans. On Black Tuesday alone, October 29, 1929, 16 million shares dropped. That year the economy lost somewhere around $40 billion — and this was back when a billion dollars was actually worth something! If the more than ten million unemployed Americans, constituting 20% of the population, had stood in a line they would have reached from New York to Seattle to Los Angeles and back to New York, with more than 250,000 people left over.
Americans were starving. Businesses were closing. Herbert Hoover attempted to fix the economy with the Reconstruction Finance Corporation and other big government programs. Then Franklin Roosevelt came in and really got the ball of central planning rolling, closing down banks, seizing gold, and establishing the Public Works Administration, the Civilian Conservation Corps, the National Recovery Administration, the Agricultural Adjustment Act, and the Federal Emergency Relief Administration — and that was only the yield of his first 100 days.
The New Deal was in many ways a war economy in peacetime, and in fact was modeled in large part on Woodrow Wilson's policies during World War I. When Franklin Roosevelt took power, he even said:
“I shall ask the Congress for the one remaining instrument to meet the crisis — broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”
Would pro-war "libertarians" have bought this analogy? Would they have agreed that the crisis America faced was so severe as to warrant the massive expansion of government to fix it? If they were actually living at the time, faced with their fellow countrymen going hungry, would have they made an exception to their anti-government principles for the dire circumstances at hand, and stood by FDR's "War on Depression"?
No way, most of them would assure us. Even when faced with national depression, principled libertarians would realize that the federal government would be incapable of fixing the problem because of the simple laws of political economy. They might also point out the history of what had happened, arguing that government itself, specifically the Federal Reserve, had caused the Stock Market crash through the devaluing of the dollar that occurred in the late 1920s. The methods of central planning that had caused the Great Depression, they would surely say, would only worsen the problem if expanded in an attempt to fix it.
History has showed this to be the case. In a time when corporations were seen as too big and monopolistic, Roosevelt's National Recovery Administration forced them to merge. In a time when Americans were going hungry, Roosevelt's Agricultural Adjustment Administration spent hundreds of millions of dollars to encourage farmers to kill livestock and destroy crops, and it paid a sugar corporation not to produce sugar. His Civilian Conservation Corps paid good money to youth to dig holes and fill them up when they could have actually been producing something. The government jailed tailors who sold suits for less than the legal price.
Needless to say (among libertarians, anyway), government's attempts to fix the economy dragged it down further. And in spite of conventional wisdom, the standard of living in America didn't pick up because of World War II, but only afterwards, when politicians stopped trying to run everything.
During the New Deal, the same type of false patriotism existed that we see now. Those who didn't go along with the government's projects were often criticized as un-American.
Would "libertarians" have buckled under the pressure, and supported the New Deal — even though it was the government that had caused the problem in the first place, and even though the laws of economics and human nature doomed any chances for government to fix it?
If the answer on everyone's mind is still no, then how do we explain the still all-too-common phenomenon of "libertarians" who support the current War on Terrorism?
Just as in the case of the Great Depression, it was government that precipitated and allowed the terror of 9/11. U.S. foreign policy incited the terrorists, who came from groups once associated with U.S. allies. The United States backed Saddam Hussein in his emergence in the Baath Party and later in the Iraqi government, and it funded and supported him during his worst crimes against humanity during the 1980s.
Just as in the case of the New Deal, the War on Terrorism has only made matters worse. The U.S. bombs that have fallen on innocents in Afghanistan and in Iraq have only served to garner more support for anti-U.S. terrorist networks such as al Qaeda. The domestic security precautions have made Americans feel like prisoners in airports, but have done nothing to stop anyone who is willing to kill himself and take innocents with him to make a violent statement of revenge. The situation in Iraq resembles liberation as closely as burning crops resembles feeding the hungry.
When government aggression is at the root of a crisis, as was the case with the Black Tuesdays of October 29, 1929 and September 11, 2001, it requires a major suspension of reasoning to think that government aggression can offer an authentic remedy. If government cannot fairly redistribute wealth, it cannot reliably stop maniacs from hijacking planes. If it can't do well in managing the economy in America, it can't do any better in managing the economy of Iraq. If it can't feed the hungry in the Dust Bowl and bring an end to economic depression, it can't liberate the world and bring an end to international terrorism.
In the year 1933 the best thing FDR could have done would have been to dismantle the regulatory apparatus established by Hoover and other presidential predecessors, and let the market bring prosperity back as quickly as possible. In 2004 the best thing President Bush can do is dismantle the American empire erected over the last few decades and let America's people and businesses develop their own security against terrorists and other criminals.
Genuine libertarians realize the universal reality behind government failure. The most libertarian Americans of the 1930s were appalled by the New Deal, and later became appalled by Roosevelt's attempts to drag America into another foreign war. These true patriotic dissidents even opposed many of FDR's wartime policies, when the pressure to be an uncritical nationalist was far greater than even today.
But would today's pro-war "libertarians," who use the terrorist crisis as an excuse to defy libertarian principles and support the War on Terrorism, have similarly used the terrible crisis of the Great Depression to defy libertarian principles and support the New Deal?
As our economy is dragged further into another depression by the lunatic fiscal and monetary policies of Washington, D.C., we just might find out.
April 26, 2004