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The End of Reform: New Deal Liberalism in Recession and War. By Alan Brinkley. (New York: Knopf, 1995. x, 371 pp. $27.50, ISBN 0-394-53573-1.)
Who are "liberals"? What is "reform"? In this courageous and invaluable book, Alan Brinkley engages the definitional land mines head on. With good sense and unusual literary grace, he shows that what commentators now think of as New Deal liberalism is not what the original New Deal was about. Today's rights-based, interest-group-based, entitlements-oriented liberalism was not the agenda of 1933-1937. The shift began with the setbacks suffered by the Roosevelt administration in 1937-1938. The abortive Court packing and government reorganization plans, plus the "Roosevelt recession," triggered a struggle for the soul of the New Deal. The combatants included advocates of National Recovery Administration-style associationalism, led by Donald Richberg; a second group, which favored vigorous antitrust action and clustered around Thomas Corcoran and Robert Jackson; and a third, exemplified by Marriner Eccles, Leon Henderson, and Alvin Hansen, which pushed proto-Keynesian spending programs.
The politics of the situation, as it evolved from recession to moderate recovery and then to full-throttle war mobilization, facilitated victory by the third group. In economists' jargon, policy emphasis moved from the supply side (encouragement of saving and investment, focused development of specific sectors) to the demand side (promotion of consumption and reliance on consumer preference as a means of directing investment decisions). In one respect, this result represented a triumph for the original "underconsumptionist" diagnosticians of the Great Depression. But, as it actually worked out, the triumph was Keynesian in nature. Not only did Keynes himself mount an attack on orthodox ideas about the merits of saving but he and his American acolytes championed deficit financing and other specific measures that would increase individuals' "propensity to consume." Put into practice, the overall result of these policies was the postwar "fiscal revolution," not only in...