The Great Depression And The New Deal
The New Deal was a brain child of Roosevelt following his ascension to power in 1933. Its main aim was to revolutionize the American economy by establishing social reforms that would create a system of private property and free enterprise. It is also through the New Deal that capitalism was revived in America. In addition, it aimed at concentration of industry and centralization of capital through government regulation, a scenario commonly referred to as monopoly capitalism. Through this system, the middle classes and the working masses were dealt a huge blow in favor of the large industries – where capital was concentrated- and enhancing the purchasing power of mainly unemployed masses as well as motivating labor unions.
Government plays a role in social problems by enacting and enforcing regulations that are aimed at ensuring the welfare of society is enhanced. In addition, government will initiate programs that are aimed at restoring social welfare such as health care facilities, education facilities and so on. For instance, Roosevelt’s idea was social reforms where he concentrated on enriching the masses and removing the class struggle. His idea was that, by giving concessions to trade unions and giving gratuity to unemployed, social status will improve and there will be less discomfort. However, this not only led to increased unemployment, but also to increased class struggle especially from the middle class and working masses. Therefore, more social problems were caused than before.
Since the great depression, government has taken the role of transforming the society from the miseries of economic and social climate. Before and during the great depression, there was little interference of government on social rights of people, but following the New Deal’ social reforms and later the New Frontier, government has been able to liberate society from oppression, poverty and war. People’s perception on government has been transformed to the view that it is the savior in times of social and economic difficulties.
One positive outcome of the deal was revolutionizing the trade unions and cutting down massive strikes witnessed earlier. Moreover, there has been witnessed social transformation with marginalized groups (women and the blacks) finding their voices and joining the workforce. In essence, it has enlightened the society. Although the New Deal was vital during the war through strengthening of state apparatus, it caused more trouble than before such as accelerated unemployment, mollifying the important sector for economic development – the idle classes and is viewed as the cause of the many wars that America is engaged in hitherto.
The great depression affected literally the whole world with low production and unemployment. This illustrates how political and economic stand offs can adversely affect the welfare of society. Fiscal policy can be effective in restoring the economic stability and could it have been used, then the magnitude of the depression could have been less (Romer, 2009).
The New Deal can to some extent offer a lifeline to the current recession in that, centralizing capital will enhance government monitoring of the production process in order to enhance efficiency; and the government can also advance loans to boost the corporations’ performance. In addition, enhancing the purchasing power of the masses will enhance consumer confidence and economic stability.
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