I’ve been enjoying some summer reading of Hard Times by Studs Terkel. I came across an interview he did with Gardiner C. Means, who was a member of the Consumer Advisory Board of the NRA (National Recovery Administration) in 1933 during the Great Depression. He was enthusiastic about the work that he did on the Consumer Advisory Board, the National Resources Planning Board, and the Budget Bureau. There had been a consequential storm of deflation in wages and prices that scared people and the NRA tried to bring wages back up and bring prices up by acting as a bridge between consumers, workers and corporations. Gardiner thought that the NRA served to make an essential improvement but he acknowledged that it was necessary to abolish it after a short time. Why?
” Things had been going downgrade–worse, worse, worse. More than anything else, the NRA changed the climate. It served its purpose. Had it lasted longer, it would not have worked in the public interest…Had the NRA continued, it would have meant dangerously diminishing the role of the market in limiting prices. You see, there was little Government regulation of the NRA. The Government handed industry over to industry to run, and offered some minor protection to others in the form of Labor and Consumer Advisory Boards. Industry became scared of its own people. Too much power was being delegated to the code authorities. It was business’ fear of business rather than business’ fear of Government…You might say, NRA’s greatest contribution to our society is that it proved that self-regulation by industry doesn’t work.” (1)
The New Deal was when neoliberal partnerships between the federal government and businesses were being tried out in the United States. Today we live with neoliberalism in a later stage after eighty four years of neoliberalism in the United States if you count the beginning of neoliberalism here as starting with the end of WWII.
The same problems erupt today in government partnerships with corporations as what Gardiner commented on under the NRA. Today, there are problems with prices not matching market demand. The market can’t limit costs because the market mechanism has been ignored by the powerful. This is true in the real estate market, in the cost of a university education, in the cost of automobiles, in the cost of pharmaceuticals and medical treatments, in the inflated stock market. There are also now added problems with tyranny growing as can be seen with covid-19 mandates and Obamacare mandates. We see fewer jobs. We see more monopolies. We see lower wages. We see falling demand for products but a huge effort by the Federal Reserve to prevent deflation that would correct higher prices than the market can support. Now we see more monetary malfeasance with printing dollars not supported by production which is leading to a lower dollar value–an effort to create inflation. We see an added problem of endless pointless bickering among politicians and an appearance of corruption. Corporations are becoming scared of each other, scared of government, scared of their own employees.
Neoliberalism is failing us. Again. If you want to learn more about political ideologies over American history and if you want to understand the way our economy is affected by political policies buy a copy of Political Catsup with Economy Fries available at Amazon.com.
(1) Studs Terkel, Hard Times: An Oral History of the Great Depression, The New Press, New York, London, copyright 1971, 1986, 247-250.