It would be a mistake to think that the New Deal represented a total break with the past trends of American history. From the beginning, we have always had a Hamiltonian element, statist and centralizing, at war with our Jeffersonian legacy of individualism and decentralized government. The notion that Franklin Roosevelt overthrew a basically laissez-faire system is untenable. One has only to recall, amid countless other interventions, the federal income tax and the Federal Reserve System, both put in place under Woodrow Wilson, as well as Wilson’s war-socialism, never entirely stamped out after World War I. Herbert Hoover, during his long post-presidential period, used to boast that his administration had decisively rejected laissez faire. He was the last president who thought that splendid accomplishment even worth mentioning.
But the changes under FDR that started with his first Hundred Days were on such a scale and left such an enduring ideological residue that they represent a quantum leap of statism in American history.
The cutting edge of the revolution was the hordes of New Dealers who manned the old and newly minted bureaucracies. As the archestablishment historian Arthur Schlesinger Jr. wrote:
They brought with them an alertness, an excitement, an appetite for power, an instinct for crisis and a dedication to public service which became during the thirties the essence of Washington.
No group was filled with more excitement or had a greater appetite for power than those quintessential New Dealers, the Brain Trust. The impact of those erstwhile professors, first assembled by Raymond Moley for the 1932 campaign, could be discerned in most of the new legislation and in its overall collectivist thrust.
Rexford Tugwell and making America over
The most prominent of the Brain Trusters and the man often considered the chief ideologist of the “first New Deal” (roughly, 1933–34), was Rexford Guy Tugwell. Tugwell was a follower of the school of thought known as Institutional Economics, founded by the eccentric writer on economics, Thorstein Veblen. His official position was assistant secretary of agriculture, that is, second in command to Henry A. Wallace, but his influence and empire-building extended far beyond that. In more ways than one, Tugwell is reminiscent of Ellsworth Toohey, in Ayn Rand’s great novel, The Fountainhead.
Tugwell was another of the progressive thinkers enamored of the experiment in war-socialism under Wilson, especially of Bernard Baruch’s War Industries Board (WIB). The First World War, Tugwell gushed, was “an industrial engineer’s Utopia.” He lamented the Armistice, which prevented the WIB from expanding into “a great experiment” in control of production and consumption.
While still in academe, Tugwell was eager to observe a land where such a “great experiment” was well under way. In 1927, he traveled to the Soviet Union. Certain aspects of the dictatorial political system he found offensive, of course, but the mighty changes in society and the economy dazzled him.
Through scientific economic planning the Soviets were able to “carry out their industrial operations with a completely thought-out program.” “The future,” he announced, “is becoming visible in Russia.”
As the Depression set in, terms like “planned economy” and “national planning” became the watchwords of the day. They had been bruited about by advanced thinkers for years and popularized by best-selling writers like George Soule and Stuart Chase, who lauded the Soviet Gosplan (central planning), asking plaintively, “Why should the Russians have all the fun of remaking a world?” The flagship of progressivism, The New Republic, made the cant phrases its constant refrain. (Just as a matter of curiosity: when was The New Republic ever right about anything?) Now, with FDR in charge, fervent apostles of the nebulous creed wielded real power in Washington.
Tugwell could not have been as effective as he was if he’d been merely a dry-as-dust economist. Instead, he was a True Believer, filled with a messianic sense of mission. This he once expressed in a poem he composed as a young man, entitled “The Dreamer”:
I am strong.
I am big and well made.
I am sick of a nation’s stenches.
I am sick of propertied czars.
I have dreamed my great dream of their passing.
I have gathered my tools and my charts.
My plans are finished and practical.
I shall roll up my sleeves — and make America over.
America — with its tens of millions of people — had to be made over, because its market economy was thoroughly obsolete, headed for the scrapheap of history:
The traditional incentives, hope of money-making and fear of money-loss, will be weakened, and a kind of civil-service loyalty and fervor will need to grow gradually into acceptance.
Echoing socialist critics from the early 19th century on, Tugwell scorned the free market as anarchical, an uncoordinated muddle of hopelessly conflicting aims and purposes. It would have to be replaced by national planning, or technocracy, another shibboleth of the day, implying rule by the technical experts, like himself.
In the future, for instance, “New industries will not just happen, as the automobile industry did; they will have to be foreseen, to be argued for, before they can be entered upon” — so, innovation by bureaucratic committee, bringing to mind another work by Ayn Rand, Anthem.
The constitutional structure of America was as archaic as the economic, according to Tugwell. It would have to be radically overhauled, and “many a sacred precedent” would have to go, he declared, adding ominously that this entailed “calling on an enlarged and nationalized police power for enforcement.” Here we’re getting into Atlas Shrugged territory.
Communism and the New Deal
Nowadays, anyone who alludes to the manifold impact of Communism on 20th-century America must face the dread accusation of “McCarthyism.” This has become a term of abuse in the political lexicon rivaled only by “fascism” and “Nazism.” It well serves the left-liberal agenda, which demands that much of what really happened in history be relegated to an Orwellian memory hole. But it is impossible to understand the New Deal and, later on, FDR’s wartime relationship with Joseph Stalin, unless we engage in what might be called a bit of scholarly McCarthyism.
Was FDR a Communist? Of course not, and neither were his big-business cronies, such as Bernard Baruch and Jesse Jones, head of the Reconstruction Finance Corporation (RFC), who dispensed government billions to some of the largest corporations in the country. And although, as we shall later see, Franklin’s administration came to be riddled with Communists, fellow travelers, and Soviet agents of influence, it would be ridiculous to think of any of the members of his cabinet as Reds.
Moreover, FDR and his followers were disdainful of the small and noisy Communist Party. For one thing, in the early 30s the CPUSA bitterly assailed Roosevelt and all his doings. The time of the United, or Popular, Front of Red collaboration with all “progressive” forces against the Right lay a few years in the future.
Still, even the apologist Schlesinger had to concede that some New Dealers felt a bond of sympathy, vague but real, with Communism. The Communists, after all, were underdogs; they were supposedly working for the common man; in the greedy business leader, Communist and New Dealers shared an enemy. What Schlesinger neglected to mention is the potent, continuing attraction that the model of the Soviet Union exerted on the minds of New Dealers in and out of government.
Among Tugwell’s mentors was the icon of progressivism, John Dewey, famed educator, social philosopher, and insufferable windbag. In 1928, in a series of articles in The New Republic, Dewey praised the new Soviet regime to the skies. It represented the “release of courage, energy, and confidence in life,” the “liberation of a people to consciousness of themselves as a determining power in the shaping of their ultimate fate,” “a release of human powers on such an unprecedented scale that it is of incalculable significance not only for that country, but for the world.” Dewey confessed that words simply failed him in expressing his unbounded admiration for Soviet education and its democratization of the arts. In Soviet Russia, they were attempting “scientific regulation of social growth.”
Harry Hopkins, who would soon become Franklin’s closest advisor, also fell under the spell of fervent admirers of the Soviet Union. John A. Kingsbury, one of the country’s leaders in the field of social work, was a kind of father figure to Hopkins. He provided Hopkins with his first job as a social worker, and their intimate friendship continued; years later Hopkins made Kingsbury his assistant at the Works Progress Administration (WPA), which he headed. Kingsbury was another progressive dazzled by what he saw in Soviet Russia in 1932, and became an apostle in spreading the Good News.
Even Hopkins’s personal psychiatrist, Frankwood E. Williams, whom he began seeing at the time of his troubles in his first marriage, was a devotee of the new order he observed in Russia. A 1932 voyage convinced Williams (a nationally prominent psychiatrist, editor of The Journal of Mental Hygiene) that the Communists were shaping a society that was free of the mental illness caused by the “atmosphere of competition and rivalry that vitiates everything from the start and at every step” in America. Inspiringly, this shrink was for once in his life overcome by a religious experience. It happened while he was packed into a Moscow streetcar, when he felt that “for a moment we are just one body,” he and the commuting Muscovites, as he later explained.
The real Russia
These are only a small sample of the innumerable cheerleaders for Soviet Russia during those years, in the government and among the opinion molders throughout American culture.
Yet it was not hard to discover the truth about Russia, for anyone who discounted the incessant propaganda and ventured beyond carefully arranged tours where secret police agents served as guides.
Lenin had erected the first totalitarian state, and his repressive policies were intensified by Stalin. By 1932, the standard of living of average Soviet workers was lower than that of the unemployed in Western countries. Tens of thousands had been shot as dissenters and as “speculators,” i.e., for engaging in trade. The Gulag was rapidly filling up with millions condemned to hunger and death. And then came the great terror-famine of 1932–33.
In this, the forgotten holocaust, some five or six or more millions died of starvation and diseases of malnutrition, mostly in Ukraine, but also in the North Caucasus and other regions. From the villages stretching across this vast area, Red functionaries nervously informed Moscow that conditions were so bad that cannibalism was becoming common.
The correspondent of the New York Times, Walter Duranty, staunchly denied in print that any famine existed, although he admitted it in private. For his reporting from Russia, Duranty won a Pulitzer Prize, on which the Times preens itself to this day.
But news of the horrors began surfacing around the world, in the New York Herald Tribune and the Chicago Daily News and elsewhere. Malcolm Muggeridge exposed them in the British press. On the basis of accounts in the Paris press, the American ambassador to France informed the State Department that the Soviet Union was “in the throes of a cruel, unprecedented, unbearable famine.”
Congressman Hamilton Fish Jr. of New York — later, because of his noninterventionist stance, one of Franklin’s pet peeves — introduced a resolution in the House taking cognizance of the bloody ordeal of millions of peasants in Russia, but it was buried in committee.
This is the background of FDR’s decision to break with the line laid down by four presidents from 1917 on and to grant official recognition to the Communist regime as the legitimate government of Russia.