THE NEW DEALERS by Jordan A. Schwarz

THE NEW DEALERS

Power Politics in the Age of Roosevelt
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KIRKUS REVIEW

 A fresh and provocative take on the economic reformism of the 1930's. This is ``not a book about the introduction of the welfare state,'' writes Schwarz (History/Northern Illinois University), but rather an investigation of what happened to capital under FDR and his successors--how it was made available to different people, organizations, and regions, and how new markets were opened for it in backward areas, first in the US, then abroad. Schwarz offers a bold exploration of how, in the face of a ``capital shortage,'' FDR broke up what he called ``static wealth'' and--at least according to the author--remade the world. One technique was ``state cartelism,'' whereby the government brought together businesses in similar industries; a more powerful strategy was ``state capitalism,'' under which government invested funds strategically to stimulate the economy in particular business and geographic areas, as with the TVA. Schwarz traces the institution of these reforms back to wartime powers that had come into being under Woodrow Wilson--powers exercised by men like William McAdoo, Bernard Baruch, and, surprisingly, Herbert Hoover, a tireless sponsor of business associations under Harding. Later figures like Jesse Jones (FDR's ``banker for twelve years''), William O. Douglas (nemesis of Wall Street), corporate lawyer Jerome Frank, and Felix Frankfurter (who brought ``tax-and-spend'' economist John Maynard Keynes into focus) are presented as dynamic but self-interested men whose energy and zest for competition are almost palpable as they struggle to shape history to the contours of their favored ideas, groups, or regions. But what particularly matters, says Schwarz, is that the control and placement of capital changed: Rather than banks deciding on projects of limited scale with rates of return carefully considered, even projects of international scale--like the Marshall Plan--became thinkable. A challenging work that, by extrapolation, speaks to our current economic problems.

Pub Date: April 4th, 1993
ISBN: 0-394-57437-0
Page count: 432pp
Publisher: Knopf
Review Posted Online:
Kirkus Reviews Issue: Feb. 15th, 1993