Look deep within United States history to find its most significant molding element and one will find that its source stemmed from a great national crisis. At its highest extent, nearly one-fourth of its labor force was unemployed and American confidence in itself was deeply shaken. It is in studying the Great Depression and President Franklin Delano Roosevelt’s New Deal, that America’s most significant influential event can be found. The New Deal and its legacy had the largest impact on American society since the founding of the United States. The New Deal altered the political and social nature of the nation as well as preserved the fundamental capitalist nature of the American economy.
At the outset, the New Deal changed the Americans’ view of their national government. Historian, William Leuchtenburg argues that the New Deal should be recognized for its transformation of how the American government works. First, he states that prior to the depression, it would have been difficult for citizens of the day to recognize a federal presence in their local communities.i Simply, before the depression the federal government rarely had a direct effect on peoples’ lives as there were no programs such as social security, welfare, federal regulation of the stock market, or farm subsidy programs.ii
The role of the federal government not only changed with the coming of the New Deal but the depression also changed the expectations American citizens had towards the national government managing the economy. Larry Madaras, professor of History at Howard College asserts that the New Deal was more than the sum total of a number of economic statistics. The true importance of the New Deal, according to Madaras, lies in the fact that Americans’ expectations towards the federal government drastically changed during the depression.iii
Historian, Carl Degler agrees. He affirms that the most striking change in American thought from the depression was the abandonment of the doctrine of laissez faire. He argues the once cherished principle was largely discarded during the depression era. Almost every New Deal program contradicted the foundations of laissez faire economics and “made inroads into the hitherto private resources of business and the individual.” iv Legislation such as the Securities Act of 1933, which created the Securities and Exchange Commission placed regulations on the stock market, the most classic of examples of the free market system. Americans supported such change with the intention of learning the lessons of the infamous stock market crash. In addition, the Tennessee Valley Authority would create a means by which the federal government would compete with private business, a most revolutionary concept.v
Furthermore, Degler maintains that proof of this fundamental change of the American psyche can be found in the permanence of some of the New Deal programs. He contends that in the 1950s the first Republican...