http://mises.org/daily/3848
by Jeff Riggenbach

In 1932, according to John T. Flynn, there were no federal "subsidies to farmers, … handouts to the indigent, [or] support [for] schools." The federal government did not "build hospitals [or] provide medical care."[1] And though it did undertake national defense, it did so much more cheaply than Americans of today are accustomed to seeing.

"The U.S. had the sixteenth largest army in the world" in 1932, William Manchester reports, "putting it behind, among others, Czechoslovakia, Turkey, Spain, Romania, and Poland." And most of those in uniform "were committed to desk work, patrolling the Mexican border, and protecting U.S. possessions overseas." What remained to defend the United States from anyone other than Mexico was "30,000 troops — fewer than the force King George sent to tame his rebellious American colonies in 1776."[2]

In constant dollars, this army cost about 0.0125 percent of what today's military costs the US taxpayer. In 1932, the federal government was seizing less than 5 percent of our national income, so it had to be a good deal more frugal than the federal government of 2005, which claims a fraction more than five times that much.

The Great Depression was underway in 1932, of course — it had been for three and a half years. Around a quarter of the workforce was out of work, banks were failing, times were hard. And President Hoover had only made matters worse. Flynn saw the "Hoover New Deal" as an effort to virtually nationalize the US economy, an effort "to organize every profession, every trade, every craft under [government] supervision and to deal directly with such details as the volume of production, the prices, the means and methods of distribution of every conceivable product."[3]

Fortunately, however, from the liberal point of view, President Hoover had been voted out of office after a single term in the White House. The American electorate had repudiated his approach to fighting the depression and had elected the Democratic candidate, Franklin Delano Roosevelt, a man who stood for small government and fiscal responsibility.

This was evident from the platform on which Roosevelt had run — a platform that called for

1. An immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus and eliminating extravagance, to accomplish a saving of not less than 25 percent in the cost of Federal government.…
2. Maintenance of the national credit by a Federal budget annually balanced .…
3. A sound currency to be maintained at all hazards.[4]

Nor was this platform meant to be taken as mere empty rhetoric of the sort people today tend to assume is characteristic of virtually all public statements by politicians. No. As Garet Garrett of the Saturday Evening Post pointed out in 1938, "Mr. Roosevelt pledged himself to be bound by this platform as no president had ever before been bound by a party document. All during the campaign he supported it with words that could not possibly be misunderstood." He said, for example,

I accuse the present Administration of being the greatest spending Administration in peace time in all American history — one which piled bureau on bureau, commission on commission, and has failed to anticipate the dire needs or reduced earning power of the people. Bureaus and bureaucrats have been retained at the expense of the taxpayer.… We are spending altogether too much money for government services which are neither practical nor necessary. In addition to this, we are attempting too many functions and we need a simplification of what the Federal government is giving to the people.[5]

Roosevelt was particularly adamant on the subject of government borrowing.

Toward the end of the campaign he cried: "Stop the deficits! Stop the deficits!" Then to impress his listeners with his inflexible purpose to deal with this prodigal monster, he said: "Before any man enters my cabinet he must give me a twofold pledge: Absolute loyalty to the Democratic platform and especially to its economy plank. And complete cooperation with me in looking to economy and reorganization in his department."[6]

True, Roosevelt's political track record was somewhat worrisome, for "as governor he took New York State from the hands of Al Smith with a surplus of $15,000,000 and left it with a deficit of $90,000,000." Still, "there was nothing revolutionary in" what he was now telling the voters.

It was … actually an old-time Democratic platform based upon fairly well-accepted principles of the traditional Democratic party. That party had always denounced the tendency to strong central government, the creation of new bureaus. It had always denounced deficit financing. Its central principle of action was a minimum of government in business.[7]

By contrast, since the time of Lincoln, the Republican party had always stood for strong central government, top-heavy bureaucracy, and hefty handouts to big business. The fact that the voters had evicted a Republican from the White House and elected a Democrat surely meant that American public opinion was leaning in a more liberal direction.
"In 1932, the federal government was seizing less than 5 percent of our national income, so it had to be a good deal more frugal than the federal government of 2005, which claims a fraction more than five times that much."

But of course Franklin Roosevelt dashed all such liberal hopes within the first hundred days of his administration. In effect, once elected, he tossed the Democratic platform of 1932 into the trashcan and proceeded to show the electorate that he could play the conservative game better than any Republican. First he took Hoover's Hamiltonian policies and enormously expanded them; then, astonishingly, he had the effrontery to describe himself and his stolen program as "liberal."

John T. Flynn, a journalist and commentator and a noted liberal spokesman since the 1920s, wrote in 1940 that "I see the standard of liberalism that I have followed all my life flying over a group of causes which, as a liberal along with all liberals, I have abhorred all my life."[8] Nor was Flynn alone in this feeling.

A number of prominent liberals, many of them writers and intellectuals, had enthusiastically supported FDR in the 1932 election, believing that he meant to adhere to the classically liberal Democratic party platform for that year. In addition to Flynn, these included H. L. Mencken, editor of the American Mercury; Isabel Paterson, iconoclastic editor and columnist at the New York Herald Tribune Sunday "Books" section; and Garet Garrett, chief editorialist at the Saturday Evening Post.

They were joined in their bitter opposition to the Roosevelt New Deal by other writers and intellectuals who, irrespective of the candidate they had supported in the 1932 election, were also old-fashioned liberals appalled by what FDR was doing under the once-good liberal name. These included Albert Jay Nock, former editor of the Freeman and regular contributor to the American Mercury, the Atlantic Monthly, and Harper's; Rose Wilder Lane, prolific freelance journalist and author; Henry Hazlitt, Mencken's successor as editor of the American Mercury and later writer on economic issues for The New York Times and Newsweek; and Felix Morley, editor of the Washington Post from 1933 to 1940 and winner of a Pulitzer Prize for distinguished editorial writing.

Certain students of American intellectual history — Murray Rothbard is among them, unfortunately — have dubbed this group of writers and intellectuals, along with the handful of politicians who adopted a similar hostility toward New Deal domestic and/or foreign policy during the 1930s and early '40s, the "Old Right." "The Old Right," declares Internet pundit Justin Raimondo in his 1993 book Reclaiming the American Right, "was that loose grouping of intellectuals, writers, publicists, and politicians who vocally opposed the New Deal and bitterly resisted US entry into World War II."[9]

"The 'Old Right' was born," writes Jude Blanchette of the Foundation for Economic Education,

in protest to Roosevelt and the New Deal. Its leaders were H.L. Mencken, Albert Jay Nock, Garet Garrett, John T. Flynn, Suzanne La Follette and Felix Morley. It is notable that what one finds in their writings one can still find in the work of most libertarians today. In fact, it could be argued that the modern libertarian movement has more in common with conservatives of the 30s and 40s than do contemporary conservatives. The ideas of the Old Right conservatives (skepticism of government planning, isolationist foreign policy and a general belief in the free market) have taken a back seat to the modern conservative emphasis on domestic pragmatism and international interventionism.[10]

"The intellectual leaders of this old Right of World War II and the immediate aftermath," Rothbard wrote in 1964,

were then and remain today almost unknown among the larger body of American intellectuals: Albert Jay Nock, Rose Wilder Lane, Isabel Paterson, Frank Chodorov, Garet Garrett. It almost takes a great effort of the will to recall the principles and Objectives of the old Right, so different is the current Right-wing today. The stress, as we have noted, was on individual liberty in all its aspects as against state power: on freedom of speech and action, on economic liberty, on voluntary relations as opposed to coercion, on a peaceful foreign policy. The great threat to that liberty was state power, in its invasion of personal freedom and private property and in its burgeoning military despotism. Philosophically, the major emphasis was on the natural rights of man, arrived at by an investigation through reason of the laws of man's nature. Historically, the intellectual heroes of the old Right were such libertarians as John Locke, the Levellers, Jefferson, Paine, Thoreau, Cobden, Spencer, and Bastiat.

"In short," Rothbard wrote, "this libertarian Right based itself on eighteenth and nineteenth century liberalism, and began systematically to extend that doctrine even further."[11]

But if they were extending the doctrine of liberalism even further, they must have been liberals, right? They must have been men and women of the Left, not the Right — right? John Moser reports of John T. Flynn that "to the end of his life he never referred to himself as anything but a liberal.… Flynn claimed that it was the American political climate that changed during his lifetime, not he. Indeed, he believed that the very term liberal had been hijacked."[12]
"The very term liberal had been hijacked."

Flynn was correct. The writers and intellectuals who made up the most visible contingent of the "Old Right" were in no meaningful sense on the Right at all. They were on the Left, where they had always been. They were liberals. The term liberal had in fact been hijacked. The "two-party system" in the United States now consisted of two conservative parties and no liberal party.

A great many of the liberals who had been left in the lurch by the Democratic party's sudden, more or less official adoption of conservatism in liberal clothing made the mistake of joining (or, at any rate, supporting) the Republican party — presumably in the belief that the opposition party, whatever its fundamental character, was where they now belonged.

As Rothbard acknowledges, the "Old Right" was a coalition, in which the libertarians and individualists — the true liberals — were not dominant. Nevertheless, he writes, they

set the tone, since individualist and libertarian rhetoric provided the only general concepts with which New Deal measures could be opposed. The result, however, was that hack Republican politicians found themselves mouthing libertarian and antistatist slogans that they did not really believe — a condition that set the stage for a later "moderation" and abandonment of their seemingly cherished principles.[13]

More important, a great many of the liberals who had been driven into the GOP, though "at first properly scornful of their newfound allies, soon began to accept them and even to don cheerfully the formerly despised label of 'conservative.'"[14]

And so it was that

the Libertarians, especially in their sense of where they stood in the ideological spectrum, fused with the older conservatives who were forced to adopt libertarian phraseology (but with no real libertarian content) in opposing a Roosevelt Administration that had become too collectivistic for them, either in content or in rhetoric. World War II reinforced and cemented this alliance; for, in contrast to all the previous American wars of the century, the pro-peace and "isolationist" forces were all identified, by their enemies and subsequently by themselves, as men of the "Right." By the end of World War II, it was second nature for libertarians to consider themselves at an "extreme right-wing" pole with the conservatives immediately to the left of them; and hence the great error of the spectrum that persists to this day. In particular, the modern libertarians forgot or never realized that opposition to war and militarism had always been a "left-wing" tradition which had included libertarians; and hence when the historical aberration of the New Deal period corrected itself and the "Right-wing" was once again the great partisan of total war, the Libertarians were unprepared to understand what was happening and tailed along in the wake of their supposed conservative "allies." The liberals had completely lost their old ideological markings and guidelines.[15]

The irony of all this was that the New Deal, the program of the fraudulent "liberals" of the Roosevelt administration, was, at heart, a profoundly conservative program. "Almost everything done during the Hundred Days," Robert Higgs reminds us, "relied on the emergency rationale and the wartime analogy. Many programs employed during World War I were resurrected."

Moreover, "the administrators of the programs came largely from the ranks of the veterans of the wartime mobilization. The rhetoric and the symbols harkened back to that glorious occasion of extraordinary national solidarity."[16] In effect, then, the First New Deal, as FDR's program during 1933 and 1934 is generally called, was merely a rebirth of the policies of Woodrow Wilson — policies which were virtually indistinguishable from the Hamiltonian conservatism of Theodore Roosevelt.
"The 'two-party system' in the United States now consisted of two conservative parties and no liberal party."

It is sometimes asserted that the so-called Second New Deal, the package of policies FDR pushed during the period from 1935 to 1938, shifted the federal government's emphasis away from legislation aimed at "cartelization and other suppressions of market competition" to benefit big business and big labor and toward legislation aimed at "helping the underdogs and building the welfare state." It is further asserted that such welfare-state legislation was opposed by the big-business interests that most benefited from conservative policymaking.

But this view of what happened in the mid to late 1930s is unduly simplistic. Much of the legislation supposedly designed during the Second New Deal to help "underdogs," like the National Labor Relations Act of 1935 and the Fair Labor Standards Act of 1938, was anticipated by one of the First New Deal's key creations, the National Recovery Administration (NRA), launched in June of 1933. As Higgs notes, the "minimum wages, maximum hours, and working conditions" stipulated by the Fair Labor Standards Act were "much like those required under the NRA's codes of fair competition." On the whole, laws like the Second New Deal's Fair Labor Standards Act should properly be regarded as the "progeny" or "spawn" of the earlier NRA.[17]

Moreover, the minimum wage, maximum hour, and working conditions provisions of the National Industrial Recovery Act of 1933 (NIRA), the enabling legislation that created the NRA, were neither intended to benefit the downtrodden, nor imposed on big businessmen against their will. As Ronald Radosh argued, back when he was a New Left Historian, the provisions in question were actually intended to benefit the big businessmen, who could use them to increase costs for their smaller competitors. In the minds of these big businessmen, their smaller competitors were competing "unfairly by cutting costs through wage reductions."[18]

Radosh approvingly quotes John T. Flynn's 1934 remark that, when it came to the NRA, "industry wanted not freedom from regulation, but the right to enjoy regulation." And in fact, as Arthur Ekirch points out, "it was industry itself that had largely prepared the regulations governing prices and production" enforced by the NRA.[19]

Taken as a whole, Radosh maintains, "the New Deal was conservative. Its special form of conservatism was the development of reforms that modernized corporate capitalism and brought corporate law to reflect the system's changed nature."[20] Or, as Rothbard puts it,

After a bit of leftish wavering in the middle of the late thirties, the Roosevelt Administration recemented its alliance with big business in the national defense and war contract economy that began in 1940. This was an economy and a polity that has been ruling America ever since, embodied in the permanent war economy, the full-fledged State monopoly capitalism and neo-mercantilism, the military-industrial complex of the present era. The essential features of American society have not changed since it was thoroughly militarized and politicized in World War II — except that the trends intensify, and even in everyday life men have been increasingly moulded into conforming organization men serving the State and its military-industrial complex.[21]

The libertarian historian Leonard Liggio takes a similar position, arguing that

the pre-war New Deal benefited big business through government privileges and concentration of economic power as much as had Hoover's policies, of which the New Deal was basically a continuation. However, the most significant result of the war economy was the increased concentration of economic power which big business derived from government contracts, and the establishment of a close relationship between big business and the military .…[22]

The New Deal was, as John T. Flynn insisted while it was happening, "a form of conservatism dressed up as liberalism."[23] The "liberals" who pushed it were actually conservatives. And the members of the "Old Right" who opposed it were actually liberals. In his brief history of "the 'Old Right' Jeffersonians," Sheldon Richman acknowledges this. "That the movement was placed on the right or called 'conservative' has to be regarded a quirk of political semantics," he writes.

In a superficial sense it qualified as right-wing because it seemed to be defending the status quo from the state-sponsored egalitarian change of the New Deal. But in a deeper sense, the New Deal actually was a defense of the corporativist status quo threatened by the Great Depression. Thus the Old Right was not truly right-wing, and since that is so, it should not be bothersome that some palpable left-wingers, such as Norman Thomas and Robert La Follette, Jr., seemed at home in the Old Right.[24]

Nor was the opposition to the New Deal primarily a Republican phenomenon. Rothbard notes that Democratic politicians like Representative Samuel Pettingill of Indiana, "Governor Albert Ritchie of Maryland, who was a candidate for the Democratic presidential nomination in 1932, and Senator James A. Reed from Missouri" were prominent in the movement against the New Deal.[25]

Ronald Radosh adds the names of Senators "Burton K. Wheeler (D. Mont.) … and Hugo Black (D. Ala.)."[26] Sheldon Richman suggests "Senators Carter Glass of Virginia, Thomas P. Gore of Oklahoma, and Harry Byrd of Virginia," as well as such "Cleveland Democrats" as "Bennett Champ Clark of Missouri, Patrick McCarran of Nevada, and David I. Walsh of Massachusetts."[27]

In fact, it was members of the Democratic party, not the Republican party, who mounted the first organized offensive against the New Deal, which they regarded as a betrayal of the liberal principles that had long served as their party's ideological foundation. The first national organization opposed to the New Deal, the American Liberty League, was founded in 1934 by a group of prominent Democrats.

There was Jouett Shouse, former Democratic congressman from Kansas, former Assistant Secretary of the Treasury in the Wilson administration, former chairman of the Democratic National Executive Committee, and former president of the predominantly Democratic Association Against the Prohibition Amendment. There was John J. Raskob, former Democratic National Committee chairman and executive of the Du Pont company and General Motors. There was John W. Davis, the 1924 Democratic presidential candidate and a J.P. Morgan & Company attorney. And there was Al Smith, former governor of New York and 1928 Democratic presidential candidate. Sheldon Richman reports that "Raskob, a good friend and fellow Catholic of Al Smith, did the bulk of the early organizing and thinking about the League."[28]


There were serious opponents of the New Deal in the GOP, too, of course. But, despite Rothbard's preposterous claim that they were "the soul of the [Republican] party," and represented "majority sentiment in the party," the fact is far otherwise. Rothbard seems actually to have believed that the only reason the so-called "Old Right Republicans" perennially "managed to lose the presidential nomination" is that said nomination was "perpetually stolen from them by the Eastern Establishment–Big Banker–Rockefeller wing of the party," which relied on "media clout, as well as hardball banker threats to call in the delegates' loans." Rothbard seems actually to have believed that "Senator [Robert A.] Taft [of Ohio] was robbed of the Republican nomination in 1952" in precisely this way — "by a Rockefeller-Morgan Eastern banker cabal, using their control of respectable 'Republican' media."[29]

But if the "Eastern Establishment–Big Banker–Rockefeller wing of the party" was so powerful, why was it never able to put its own man, Nelson Rockefeller, in the White House — or even win him the GOP nomination? It's not as though he didn't try for it time and again. The fact is that, as Clyde Wilson puts it, the "Old Right" members of the Republican party simply "never had sufficient strength" within the party "to nominate a presidential candidate or prevent very many evils."