Myth Of The 20th Century – Episode 9: The New Deal – Reflections On Italy, Germany, And The United States

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Adam Smith, Alex Nicholson, Hank Oslo, Mark Brown, and Nick Mason.

Notes:

Every generation has a choice – that of adopting the previous generation’s ways and customs, or to cast some or all of these away in forging a new path. Most choose the former, inheriting the structural inertia of generations past, while occasionally, a people decide the time is right to try something new. In the aftermath of WWI and the subsequent poverty, hyperinflation, or eventual depression ultimately experienced in the 1930s, Italy, Germany, and the United States each broke from prior traditions of free market liberal democracy to that of a more authoritarian, centralized command economy that, to varying degrees of success on the verge of WWII, had brought each of the nations out of the depths of the Great Depression. Today, we examine these three New Deals.

Timeline:

1922- Benito Mussolini leads 30,000 Fascist blackshirts on the March on Rome, after which he is appointed Prime Minister by King Victor Emmanuel III
1925- Italy begins the ‘Battle of the Grain’
1926- Italy begins the ‘Battle of the Lira’
1928- Italy begins the ‘Battle of the Land’, which by 1933 successfully drains and reclaims the Pontine marshes, which had lain fallow for over 2,000 years
1928- Franklin Delano Roosevelt elected governor of New York
1929-39- Italian economy grows by 16%
1932- although relatively unaffected by the Great Depression, Italian unemployment rises to 1.2 million (about 3%)
1933- The Industrial Reconstruction Institute (IRI) formed, giving Italy the largest state-owned industrial sector in Europe (excluding the USSR)
1933- FDR inaugurated, begins ‘First 100 Days’ of intensive legislative activity
1933- Agricultural Adjustment Act (AAA) begins paying American farmers to destroy produce and livestock
1933- Civilian Conservation Corps (CCC) employs young American men to perform unskilled work in rural areas
1933- Tennessee Valley Authority (TVA) begins modernization of poor river valley and construction of hydroelectric dams
1933- Adolf Hitler appointed chancellor of Germany
1933- NSDAP share of the vote reaches 43.9%, making it the largest party in Germany
1933- construction begins on the Reichsautobahn, finishing roughly 2,500 miles of expressway in Germany by 1941
1933-1936- German employment in construction rises from 666,000 to over 2,000,000
1934- German Charter of Labour passed, banning worker strikes
1934- The United States passes the Communication Act, restricting radio licenses to 6 months, prompting a German PhD student to remark: “State control is a reality in America today”
1935- National Labor Relations Act (NLRA) / Wagner Act sets up National Labor Relations Board (NLRB) to supervise American labor-management relations
1935- Work Progress Administration (WPA) provides work for several million in construction work, completing over 651,000 miles of roads, 125,000 buildings, and 8,000 parks by 1942
1935- Italy invades Ethiopia, League of Nations roundly condemns it
1936- military spending in Germany rose to 10% of GNP, in violation of the Versailles Treaty
1936- Italy and Germany jointly aid Franco’s Nationalist forces in the Spanish Civil War
1937-38- The United States experiences a recession, bringing unemployment from 14.3% to 19%
1939- German arms production accounts for 60% of government spending
1939- Germany invades Poland, France and Britain declare war on Germany, beginning World War II
1940- FDR institutes the first peacetime draft in the United States, unemployment drops to under 10%

References:

– The Doctrine of Fascism, Mussolini (1932)
– The New Dealers’ War, Fleming (2002)
– Depression, War, and Cold War, Higgs (2006)
– Three New Deals, Schivelbusch (2006)
– New Deal – https://en.wikipedia.org/wiki/new_deal
– The Great Depression – https://en.wikipedia.org/wiki/Great_Depression
– The Great Depression 3 – New Deal, New York – https://www.youtube.com/watch?v=a5n4u4cF4Pg
– Inside the Third Reich, Myth of the 20th Century – https://myth20c.wordpress.com/2016/08/11/inside-the-third-reich-part-1-before-the-war/
– Germany: The Rise of Adolf Hitler, Delong – http://www.j-bradford-delong.net/TCEH/Slouch_Purge15.html
– Great Depression Statistics, http://www.shmoop.com/great-depression/statistics.html
– Federal Net Outlays as Percent of Gross Domestic Product, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/FYONGDA188S

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3 Comments

  1. 1947- The Supreme Court rules that a farmer growing corn on his own land to feed his own chickens qualifies as “interstate commerce” and is thus subject to Federal regulation.

    F. A. Hayek described it as something like this:

    (1) A Party gets voted into power by promising a Plan to fix some pressing social problem, ignoring the fact that if said problem could be solved by majority opinion, the majority would have already solved it.

    (2) Representing a diverse coalition of interest groups, Party members cannot agree on a simple, specific Plan, so they cobble together a Rube Goldberg monstrosity with just the right mix of hokum and magic pixie dust to appease all factions.

    (3) This Plan is put into action and quickly falls apart. Saboteurs of the opposing party must be blamed, and decisive executive action must be taken to save the Plan. Each fix exposes more flaws, so the Plan now changes unpredictably from day to day.

    (4) WAR!!! We must defeat this other country! The enemy leaders also welcome war as a distraction from their own failed Plans.

    (5) The war ends, and the vanquished leaders are hanged while the victors wave to vast cheering crowds. The old, failed Plans are forgotten, and it’s time for a new Plan to rebuild the country. Back to stage (1).

    Reply

    1. We seem to be stuck in (2).

      Reply

    2. I audibly laughed at that parable. Interstate Commerce for feeding chickens.

      Truly remarkable.

      Reply

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