Capitalism and the Government

CAPITALISM AND THE GOVERNMENT The progressive era , the New Deal and the US South Economic development 1870s-1890s • • • • • Telegraph/telephone Urbanization Railroads Increased production: more resources and markets needed → Imperialism. Rapid economic growth. Economic integration → connected and dependence to the modern develoments. Railroad development • • • • Integration of the nation: creation of a national market thanks to the railroad the businesses went from local to national. Marketing of goods. Railroads and the multiplier effect (growth in different sectors): steel industry, meatpacking and food processing industry. Railroad industry as “big business”, there were just a few companies that controlled the railroad, this created tension within the public. Standard Oil octopus • • • • Puck magazine September 7, 1904. John D. Rockefeller and Standard Oil. The rise of trust: business consolidation. It becomes shareholders of other companies, control over multiple companies within the same sector to get rid of competition and maintain high prices. An example of business consolidation, not seen as a positive by the people. It has power over political institutions, corruption. The Robert Barons • • • • They were those who ha power over the economy→ Rockefeller. Exploitation of labour→ no working rights. Extreme wealth vs. extreme poverty. Growing class divisions. How the Other Half lives • • • Mucrakers: published about the “dark side” of the Gilded Age: awakened public opinion to the capitalism with no government control. Jacob Riis, How the Other Half lives, 1890: shocking account of living conditions among the urban poor. Lincoln Steffens, The Shame of the Cities, 1904: party bosses and business leaders profiting from political corruption. • • • Ida Tarbell, History of the Standard Oil Company, 1904: arrogation and machinations of Rockefeller’s Standard Oil Company. Theodore Dreiser, Sister Carrie, 1900: a young woman’s moral corruption in Chicago’s harsh urban environment. Upton Sinclair, The Jungle, 1906: unsanitary conditions in slaughterhouses; sale of rotten meat. The Progressive Movement I • • • • • Fight poverty, economic insecurity, and lack of industrial democracy. Fix the consequences of the Gilded Age by implementing control mechanisms. Loose coalition, not well organized group with distinctive factions such as labour activists, female protection, social scientists and members of the anxious middle class. Progressivism in the White House: TR. Square Deal: break up “bad trusts”, “honest broker” in labour disputes, regulate railroad industry and food producers (1906 Pure Food and Drug Act). Government by expert: impulse toward order, efficiency, and centralized management. Precursor to the New Deal. TR: Gunboat Diplomacy (order & efficiency abroad, TR style) • • • • • • • 1903: and independence of Panama from Colombia, construction of Panama Canal. Cuba: Platt Amendment, gave US authority to intervene in case of internal or external threat to Cuba’s “independence”. As with Native Americans and African Americas, US leaders thought Cubans unfit for self-government. Orville Platt: Cubans “are like children” and US should be “in position to straighten out things” when it deemed such a course of action necessary. Establishment of permanent naval base in Guantanamo Bay. Venezuela Crisis: TR essentially expanded Platt Amendment to the entire Western Hemisphere, the Roosevelt Corollary to the Monroe Doctrine, 1904. Financial crisis because Europeans blockaded the country so they would pay their debts. TR convinced them to withdraw, thus he adds a clause to the Amendment. 1905: US troops dispatched to Dominican Republic to restore financial situation. President Howard Taft 1909-1913: Dollar Diplomacy, emphasis on economic improvements and loans from US banks (1912 US intervention in Nicaragua). It still controls the other nations. The Progressive Movement II • • • Woodrow Wilson 1913-1921, southerner. Stronger antitrust legislation, worker’s rights, labour unions, tried to outlaw child labour. Graduated income tax on richest percent of US population. • • Increased government supervision of economy. Protection of citizens from abuse and acted as a broker. Wilsonian foreign policy towards Latin America • • • • Moral imperialism (Dutch ethical policy in Indonesia): “I am going to teach the South American republics to elect good men.” Moral Imperialism and US exceptionalism: “go out and sell goods that will make the world more comfortable and happy, and convert them to the principles of America”. Democratic Peace Theory. Many interventions: 1914 in Mexico, 1915 in Haiti, 1916 in Dominican Republic, supervision of elections in Nicaragua, acquisition of Virgin Islands from Denmark. US secured its control over Caribbean during WWI, gave the US this opportunity as the European powers were focused on each other. US has a sense of isolation. Roaring Twenties 1920s • • • • • The end of the Progressive politics, rise of “businessmen’s government” (Harding and Coolidge). Growth of US economy, increase in exports and expansion of global economic involvement. US preached “open door” in Asia but tried to retain “closed door” in Caribbean and Latin America. Other countries retaliated: higher tariff on US products in late 1920s and 1930s. 1929: start of Great Depression, limited feral oversight over banking (frenzied speculation), crisis in agriculture, and massive inequality in income distribution. Franklin D. Roosevelt 1933-1945 • • • • • Democrat. New Deal: Progressive Era tradition. “Good Neighbour Policy” towards Caribbean and Latin America: instead of dispatching the Marines, rely on local strongmen → Somoza in Nicaragua, Trujillo in Dominican Republic, Batista in Cuba). 1934: repeal of Platt Amendment. Redefined American liberalism. o “The liberal party insists that the Government has the definite duty to use all its power and resources to meet new social problems with new social controls -to ensure to the average person the right to his own economic and political life, and the pursuit happiness.” The New Deal Coalition • • Western and southern farmers. Urban working class→ labour unions. • • • • Catholic and Jewish immigrants and their offspring. Poor and unemployed. Black communities in northern and western cities → Great Migration from the South that started during WWI. FDR’s electric basis for electoral success: urban and rural, intellectuals and farmers/labourers, white southerners and minorities (racial, religious and ethnic). The New Deal Era • • First New Deal: recovery and relief 1933-1935 o AAA: agricultural adjustment act. o FERA: federal emergency relief administration and PWA, public works administration. o CWA civil works administration and CCC, civilian conservation corps. o NIRA: national industrial recovery act and NRA national recovery administration. o TVA: Tennessee valley authority. Second New Deal: reform, structural change 1935-1938 o WPA: works progress administration→ public works construction, smaller projects in comparison with PWA, unskilled workers. o REA: rural electrification administration. o Social Security Act: did not apply to agricultural and domestic workers. o Wagner Act: labour rights. o Federal judiciary system: “court-packing plan”. o 1938 “Purge”. Presidential election 1936 Landslide for FDR against Alf Landon: the Solid Democratic South. Limits of change: the South • • • • • Monocrop agriculture and overproduction. One-party politics. Planter dominance. The “feudal” South: poverty, institutionalized white supremacy, antidemocratic political culture. “The nations nº1 economic problem”. The New Deal and the South • • • Agricultural Adjustment Act (AAA, 1933): primarily relief for planters. Crop reduction and mechanization: disastrous for sharecroppers (agricultural workers living in the plantations). Louisiana Farmer’s Union (LFU): grassroots organizing and collective action to fight planter hegemony and gain access to FSA loans (Greta de Jong). • • • Pictures Boyle: what did grassroots organizing in the Deep South look like? LFU: some local successes, but not real challenge to southern social system or to entrenched interests in federal government Democratic Party. 1938: FDR decided to action. The Purge of 1938 • • US Senator Walter George of Georgia: a conservative southern Democrat. August 1938: FDR campaigns in Barnesville, GA, for Lawrence Camp, Walter George’s opponent in the Democratic primaries. The end of the New Deal and the coming of WWII The rise of fascism in Europe, growing US involvement in international affairs, and the abandonment of the New Deal. Pearl Harbour • • • • • Southern Democrats and the preparation for war. August 1941: FDR met with Churchill. December 7, 1941: “A date which will live in infamy”. US enters the war officially. The New Deal did not solve the economic crisis, but WWII did as the US became a war industry. The New Deal and capitalism It was never the goal of New Dealers to destroy capitalism. Like late 19 th century reformers, their aim was to devolatize capitalism and to distribute its benefits more evenly across the population. The federal initiatives of the 100 Days were designed, observed NRA director Donald Richberg, “to promote a more stable and evenly distributed prosperity”, to create, writes historian Ira Katznelson, “a more vibrant and less unequal capitalism in a manner that would be consistent with democratic values” (Dailey, p. 157). ND and the progressives tried to redistribute wealth so more citizens could benefit from capitalism. Harry Truman builds on this legacy, the Fair Deal.