Commentary

FDR and the American System

By Nancy Spannaus

June 16, 2020—Over 100 days in 1933, newly inaugurated Franklin Delano Roosevelt took a giant step toward the revival of the American System of Economics. The core of that system, as reflected in the Preamble to the U.S. Constitution, is the Federal government’s responsibility for energetically promoting the general welfare of the entire population, through advancing technological progress and internal improvements.

FDR and the American System

Franklin Roosevelt addresses the nation on banking crisis in March 1933

When the 100-day emergency session of Congress concluded on June 16, 1933, significant measures had been taken in all these areas.  Through the Glass-Steagall Act and the Gold Act, the national government had begun to bring Wall Street under control and restore national sovereignty and trust to our credit system. Through the Federal Emergency Relief Act, the Emergency Farm Mortgage Act, and the establishment of the Civilian Conservation Corps (among other measures), millions of Americans were rescued from eviction, unemployment, and starvation. Through the establishment of the Tennessee Valley Authority, the Federal government initiated the transformation of a region ridden with disease and abject poverty into a prosperous center for agriculture and industry through a program which became a model for the world.

With all these measures, imperfect as they were, FDR’s administration began to restore faith in the Federal government, and assert its rightful role in guaranteeing credit, health, and well-being to the population as a whole. In so doing, FDR was implementing principles pioneered by Alexander Hamilton during the George Washington Administration. And, of course, that was only the beginning.[1]

Most of those who advocate a return to FDR’s approach today will disagree with my assessment of FDR. That’s because the true nature of Hamilton’s political economy and the American System have been either misrepresented or buried today. As I stated in the introduction to the second edition (1996) of my first book, The Political Economy of the American Revolution, “it would be only a small exaggeration to say that the American people has undergone a lobotomy relative to its real history,” especially relative to political economy.

The Role of AmericanSystemNow

It was in order to cure that ignorance that I began this blog three years ago today.  The intent was to provide an historical resource that would revive the ideas of Hamilton, Mathew Carey, John Quincy Adams, Henry Carey, Abraham Lincoln,[2] and many others who played seminal roles in building the industrial might of the United States. My audience was not only the general public, but national policymakers, from academia to the Halls of Congress.

Alexander Hamilton, in a painting by John Trumbull.

In February 2019 I supplemented the blog’s work with the publication of Hamilton Versus Wall Street: The Core Principles of the American System.

Over those three years, my audience has grown – but nowhere near as fast as the emergency conditions demanding a return to American System principles. There have been some encouraging signs of a revival of Hamilton’s principles, specifically with the activity of the Alliance for American Manufacturing and the newly founded group the American Compass. Unfortunately, these efforts have so far been combined with an aggressive and dangerous demonization of China, that undercuts its positive direction.

At the same time as the idea of reviving Hamilton’s approach to Federal government support for manufacturing and infrastructure has grown, however, so has the campaign for trashing our nation’s positive accomplishments on the spurious basis that our nation’s history has to be seen entirely through the lens of the evil of slavery. Interestingly, my posts opposing this campaign have been by far the most popular on the blog during 2020. Way ahead was “Hamilton’s Economics Aimed to End Slavery;” in second place was “Frederick Douglass: `Knowledge Unfits a Man to be a Slave.’”

At a time when “gut feelings” seem to be driving a fraticidal mood of conflict in our country, I can’t think of a better motto for how we must proceed than Douglass’s statement above. I’m sure Alexander Hamilton would agree.

Let’s expand the knowledge of the real American System, and, like FDR, put it to work.

 

[1] A wide array of articles on FDR’s programs, both during the New Deal and the economic mobilization for World War II, are available on the blog.

[2] The blog contains significant historical material on all of these figures, but I will not cite the articles here.

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