The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence 9780823296972

Citation preview

THE NEW DEAL AND THE PROBLEM OF MONOPOLY

THE

NEW DEAL AND THE PROBLEM OF MONOPOLY A Study in Economic Ambivalence

ELLIS

W.

HAWLEY

FORDHAM UNIVERSITY PRESS NEW YORK

Copyright© 1995 by Fordham University Press Copyright© 1966 by Princeton University Press Reprinted, with a new introduction, by arrangement with Princeton University Press All rights reserved LC 95-15942 ISBN 0-8232-1608-x (hardcover) ISBN 0-8232-1609-8 (paperback) Second printing, 1996

Libl'lll'y of Congress Cataloging-in-Publication Data Hawley, Ellis Wayne, 1929The new deal and the problem of monopoly : a study in economic ambivalence I Ellis W. Hawley. p. em. Includes bibliographical references and index. ISBN 0-8232-1608-X (hc).-ISBN 0-8232-1609-8 (pbk.) I. Industrial policy-United States-History-20th century. 2. United States-Economic policy-1933-1945. 3. New Deal, 1933-1939. 4. Roosevelt, Franklin D. (Franklin Delano), 1882-1945. 5. Monopolies-United States-History-20th century. 6. Antitrust law-United States-History-20th century. 7. United States. National Recovery Administration. 8. Elite (Social sciences}United States-History-20th century. 9. Depressions--1929-United States. I. Title. HD3616.U46H33 1995 338. 8'2'0973-dc20 95-15942 CIP

Printed in the United States of America

]o-

Lhe .//llem,c'C'j

o-i

J-/.cwatJ /( /:)eafe

PREFACE of the central problems of twentieth-century ® America has revolved about the difficulty of reconNE

ciling a modern industrial order, necessarily based upon a high degree of collective organization, with democratic postulates, competitive ideals, and liberal individualistic traditions inherited from the nineteenth century. This industrial order has created in America a vision of material abundance, a dream of abolishing poverty and achieving economic security for all; and the great majority of Americans have not been willing to destroy it lest that dream be lost. Yet at the same time it has involved, probably necessarily, a concentration of economic power, a development of monopolistic arrangements, and a loss of individual freedom and initiative, all of which run counter to inherited traditions and ideals. Americans, moreover, have never really decided what to do about this industrial order. Periodically they have debated the merits of "regulated competition" and "regulated monopoly," of trustbusting and economic planning; and periodically they have embarked upon reform programs that would remake the economic system. Yet the resulting reforms have been inconsistent and contradictory. Policies that would promote competition have been interspersed with those that would limit or destroy it. And American economists as a whole have never reached any real consensus in regard to the origins and nature of monopoly, its effects, or the methods of dealing with it. During the period covered by this study, the six-year span from 1933 to 1939, this conflict over economic policy was particularly acute. The industrial machine, for all its productivity, was seemingly unable to fulfill the dream of abundance and security, and its failure to do so led to demands for political action. Yet there was little agreement on the course that this action should take. Did the vii

PREFACE

situation call for centralized planning and detailed regulation? Did it call for a restoration of competition? Or did it call for government-sponsored cartels that could rationalize the competitive process and weather deflationary forces? In practice, there were a variety of pressures and forces pushing the government in all of these directions. The result was an amalgam of conflicting policies and programs, one that might make some sense to the politician, but little to a rational economist. Historians, of course, have long been aware of these conflicting crosscurrents in the New Deal's business policies. Arthur M. Schlesinger, Jr., for example, has dealt extensively with the conflict between the economic planners and the neo-Brandeisians, and Eric Goldman, in his Rendezvous with Destiny, described the New Deal as an amalgam of the New Nationalism, the New Freedom, and the Associational Activities of the nineteen twenties. So far as I know, however, no one has yet focused upon this conflict as a central theme or attempted to trace out, describe, and analyze its implications in detail. The present study makes an effort to fill this gap. It attempts, first of all, to trace the pattern of conflict and compromise between various schools of thought, between those which desired a type of rationalized, governmentsponsored business commonwealth, those that hoped to restore and preserve a competitive system, and those that envisioned a form of democratic collectivism in which the monopoly power of businessmen wm ld be transferred to the state or to other economic groups. Secondly, it attempts to relate these various schools of thought to the interplay of pressure groups and popular symbols, to trace the major shifts and innovations in policy, and to explain these policy changes. Throughout the study, in fact, the emphasis is on policy-making, on the men, beliefs, pressures, and symbols that resulted in policy decisions, not on the validity or economic merit of the policies involved. The study is also limited primarily to the field of business Vlll

PREFACE

and does not attempt to deal in any detail with agricultural, labor, or financial policies. My chief debt is to the late Howard K. Beale of the University of Wisconsin, under whose direction this study was originally undertaken. His suggestions, criticisms, and support were invaluable. In addition, I should like to express my gratitude to the following: Professor Robert A. Lively, whose stimulating teaching provided many insights and suggested the topic of research; Professor Paul F. Sharp, for his criticisms, suggestions, and encouragement on portions of the study; and Professor James C. Malin, who first aroused my interest in this general subject. I am also deeply indebted to a number of devoted and competent librarians and archivists, particularly to Meyer H. Fishbein and his assistants at the National Archives, to Herman Kahn and his staff at the Roosevelt Memorial Library, and to Gene M. Gressley and his staff at the University of Wyoming. ELLIS

North Texas State University

IX

w. HAWLEY

CONTENTS PREFACE

Vll

ABBREVIATIONS

Xlll XV

NOTE ON SOURCES INTRODUCTION TO THE

199 5 EDITION

INTRODUCTION • THE PROBLEM AND ITS SETTING

XVll

3

PART I · THE NRA EXPERIENCE 1 · THE BIRTH OF AN ECONOMIC CHARTER

19

2 • THE CONFLICT OF GOALS

35

3 · THE TRIUMPH OF INDUSTRIAL SELF-GOVERNMENT

53

4 · THE ASSOCIATION IDEA IN RETREAT

5·

THE POLICY DEADLOCK

6 · THE LAST DAYS OF THE NRA 7 · THE NRA IN RETROSPECT

72

91 111 130

PART II · ECONOMIC PLANNING IN THE POST-SCHECHTER ERA 8 · THE FADED DREAM OF THE BUSINESS COMMONWEALTH

9 · THE MIRAGE OF NATIONAL PLANNING 10 · THE CONCEPT OF COUNTERORGANIZATION 11 · PARTIAL PLANNING IN SICK AND NATURAL

149 169 187 20 5

RESOURCE INDUSTRIES

12 · PARTIAL PLANNING IN THE TRANSPORTATION 226

INDUSTRIES

13 • PARTIAL PLANNING IN THE DISTRIBUTIVE AND 247

SERVICE TRADES

14 · NEW DEAL ECONOMIC PLANNING IN RETROSPECT

270

PART III · THE ANTITRUST TRADITION THE ANTITRUSTERS AND THE MONEY POWER

283 304

THE ANTITRUSTERS AND THE POWER TRUST

32 5

THE ANTITRUSTERS AND THE TAXING POWER

?44

15 • THE ANTITRUSTERS AND THEIR PROGRAM

16 17 18 19

· · · ·

FURTHER SKIRMISHES ON THE ANTITRUST FRONT,

1934-1937

300 XI

CONTENTS

PART IV · NEW DEAL POLICY AND THE RECESSION OF 1937 20 • THE RECESSION AND THE SEARCH FOR A POUCY

383

21 • THE MONOPOLY INQUIRY AND THE SPENDING PROGRAM 22 • THURMAN ARNOLD AND THE REVIVAL OF

404

ANTITRUST PROSECUTION

420

23 · THE ARNOLD PROGRAM IN PRACTICE 24 · THE CONTINUED DEBATE

439 456

CONCLUSION • THE NEW DEAL AND THE PROBLEM OF MONOPOLY: RETROSPECT AND

472 495

PROSPECT INDEX

XII

ABBREVIATIONS In addition to standard abbreviations, the following are used throughout: AM-Agricultural Adjustment Administration AC-Advisory Council (NRA) AEA-American Economic Association AER-American Economic Review AHR-American Historical Review Annals Am. Acad.-Annals of the American Academy of Political and Social Science BAG-Business Advisory Council BAPC-Business Advisory and Planning Council CAB-Consumers' Advisory Board (NRA) CAF-Consolidated Administrative File (NRA Records) CCF-Central Correspondence File (NRPB Records) CCH-Commerce Clearing House CGF-Classified General File (NRA Records) CHF-Code Histories File ( NRA Records) CIA-Committee of Industrial Analysis CIC-Coordinator for Industrial Cooperation CIP-Council for Industrial Progress CTS-Consolidated Typescript Studies (NRA Records) DIE-Division of Industrial Economics FDR-Franklin D. Roosevelt FPC-Federal Power Commission FTC-Federal Trade Commission GPO-Government Printing Office lAB-Industrial Advisory Board (NRA) ICC-Interstate Commerce Commission LAB-Labor Advisory Board (NRA) MR&D-Miscellaneous Records and Documents (NRA Records) MVHR-Mississippi Valley Historical Review NAM-National Association of Manufacturers NBCC-National Bituminous Coal Commission Xlll

ABBREVIATIONS

NEG-National Emergency Council NIRA-National Industrial Recovery Act NIRB-National Industrial Recovery Board NPB-National Planning Board NPPG-National Power Policy Committee NRA-National Recovery Administration NRB-National Resources Board NRC-National Resources Committee NRPB-National Resources Planning Board NRRB-National Recovery Review Board OF-Official File(s) (Roosevelt Papers) PPF-President's Personal File(s) (Roosevelt Papers) PR-Press Release PSF-President's Secretary's File (Roosevelt Papers) PWA-Public Works Administration QJE-Quarterly Journal of Economics R&P Div.-Research and Planning Division (NRA) SEC-Securities and Exchange Commission SIRE-Special Industrial Recovery Board SR&P-Special Research and Planning Reports (NRA Records) TNEG-Temporary National Economic Committee TVA-Tennessee Valley Authority WPA-Works Progress Administration

XlV

NOTE ON SOURCES IN order to avoid an excessively large number of notes, I have followed the practice of collecting the references necessary for a particular passage in a single note at the end of the passage. The full citation to each title is given on the first mention in each chapter. Of the manuscript and archival collections cited, the Franklin D. Roosevelt and Harry L. Hopkins papers are in the Roosevelt Library at Hyde Park, New York; the Harold L. Ickes and William Borah papers are in the Library of Congress; the Thurman W. Arnold and Joseph C. O'Mahoney papers are in the University of Wyoming Library at Laramie, Wyoming; and the records of the National Recovery Administration, the Temporary National Economic Committee, the National Resources Planning Board, the National Emergency Council, the National Bituminous Coal Commission, the National Power Policy Committee, and the Works Progress Administration are in the National Archives. Special mention should also be made of two collections of source materials on the NRA. One is the Division of Industrial Economics' Staff Studies (cited as DIE, Staff Studies) available in mimeographed form at the National Archives. The other is the NRA Work Materials, which were mimeographed and distributed to depositories of government documents in 1935 and 1936.

XV

INTRODUCTION TO THE 1995 EDITION ~REPRINTING

of The New Deal and the Problem of atl Monopoly offers an opportunity to reconsider the literature to which it belongs and the relevance it has had to interpretive debates since its publication nearly thirty years ago. Since that time no full-scale alternative treatment has replaced its account of the economic policy struggles taking place during the New Deal period. But challenges to its interpretation of the story have appeared, as well as studies that have supplemented its findings, fleshed out additional detail, added meaningful and needed perspective, and attempted to integrate it into larger histories of the New Deal system or of business and government in modern America. At times I have had occasion to ponder anew the meaning and implications of the struggles upon which I focused in 1966. And in what follows I want to combine a brief look at what entered into the research and writing of the book with a brief review of the changing literature to which it has belonged or been connected, some commentary on what deserves rethinking and alteration in the light of more recent scholarship, and some reflections on how I might have written the book had I been undertaking it today rather than three decades ago. The core literature to which the book belongs is that of New Deal reform in the years from 1933 through 1939, especially as it affected the structure and functioning of the American business system. 1 Its major concern 1 Other commonly cited titles in this literature are Bernard Bellush, The Failure of the NRA (New York: Norton, 1975); Philip J. Funigiello, Toward a National Power Policy: The New Deal and the Electric Utility Industry,

1933-1941 (Pittsburgh: Pittsburgh University Press, 1973); Robert F. Himmelberg, The Origins of the National Recovery Administration: Business, Government, and the Trade Association Issue, 1921-1933 (New York: Fordham University Press, 1976; repr. 1994); Mark Leff, The Limits of Symbolic Reform: The New Deal and Taxation, 1933-1939 (Cambridge: Cambridge University Press, 1984); Dean L. May, From New Deal to New Economics: The American Liberal Response to the Recession of 1937 (New York: Garland, XVll

INTRODUCTION TO THE 199

5

EDITION

is with telling the story of how competing designs for reforming the business system, each seen as a way to economic recovery, interacted with each other and with a changing political environment to produce a policy mix more capable of meeting the New Deal's political needs than the nation's economic ones. What is said, however, has implications not only for the larger stories of New Deal politics and Depression-era reform of the political economy but also for the way that one recounts and interprets the histories of business-government relations, regulatory state-building, economic policymaking, and antitrust law in twentieth-century America. In a broader sense, the book also belongs to the literatures produced by students of these subjects. And, as subsequently noted in more detail, it has been used and cited by a number of those involved in the historiographical controversies that have enlivened the more recent work in producing additions to and revisions of these literatures. It has found a place, in other words, not only in bibliographies of the New Deal but also in those compiled by business, regulatory, antitrust, and economic policy historians as well. My engagement with the subject of the book began with a deep interest in the establishment and functioning of the New Deal's National Recovery Administration (NRA). This originated in a college history course. Subsequently, I wrote a master's thesis, suggested by James C. Malin at the University of Kansas, exploring the relationship between Herbert Hoover's ideas and those in 1981); James S. Olson, Saving Capitalism: The Reconstruction Finance Corporation and the New Deal, 1933-1940 (Princeton: Princeton University Press, 1988); Michael E. Parrish, Securities Regulation and the New Deal (New Haven: Yale University Press, 1970); Theodore Rosenof, Dogma, the Depression, and the New Deal: The Debate of Political Leaders over Economic Recovery (Port Washington, N.Y.: Kennicut, 1975); Albert U. Romasco, The Politics of Recovery: Roosevelt's New Deal (New York: Oxford University Press, 1983); and Michael M.Weinstein, Recovery and Redistribution under the NIRA (Amsterdam: North-Holland, 1980). XVlll

INTRODUCTION TO THE 199 5 EDITION

the National Industrial Recovery Act. 2 And when it came time to write a doctoral dissertation, I decided to study the workings of the NRA code system and eventually extended this to include the policies toward business that followed the NRA's demise. By this time, moreover, my research had uncovered two themes that came to inform the finished dissertation. One was that the New Deal period represented a particularly intense phase of a deep-rooted and continuing conflict between modern organizational values and those grounded in eighteenthand nineteenth-century individualism. The other was that one could find in New Deal policy-making a trinity of competing ideas concerning economic power and how to direct it to social purposes. In part, I drew the latter notion from a reading of Eric Goldman and Arthur Schlesinger, Jr. 3 But more influential was an article by William Hale in the July 1938 issue of Common Sense. From it I took the term "business commonwealth. "4 Finished in 1959, the dissertation needed extensive reworking to make it into a publishable book. I needed, in particular, to reduce its length, fill gaps in the story told and the research done, sharpen its central arguments, and relate my interpretation of policy outcomes to recent developments in New Deal historiography. This proved to be an arduous task. But the revision, I believe, did bring the story and its meaning into sharper focus and make clear how the competing and incompatible visions of a business commonwealth, national economic planning, and market restoration emerged as prescriptions for economic recovery and interacted with each other to produce a policy stalemate in the NRA, 2 "The Relation of Hoover's Policies to the National Industrial Recovery Act," M.A. thesis, University of Kansas, 1951. 3 Eric F. Goldman, Rendezvous with Destiny (New York: Knopf, 1952); Arthur M. Schlesinger, Jr., The Crisis of the Old Order, 1919-1933 (Boston: Houghton Mifflin, 1957). " William Harlan Hale, "The Men Behind the President: What They Think," Common Sense, 7 (July 1938): 16-20.

XlX

INTRODUCTION TO THE 199 5 EDITION

policy incoherence and confusion in the alternative recovery programs of 1935 and 1938, and eventually a post-New Deal economy "characterized by private controls, partial planning, compensatory governmental spending, and occasional gestures toward the competitive ideal" (p. 490). Also made clear, I believe, was the cultural ambivalence toward "big business" that limited what the American polity could do about economic disorders and was strikingly evident in President Franklin Roosevelt's own thinking. And in the judgment of one reviewer, the book did more than any previous work to pull together the many "odd-shaped pieces that make up the New Deal on its policy-making (as distinct from its political) side. "5 While revising the dissertation, I was also aware of historiographical developments that were reshaping the history of liberal reform in America and with it the history of the New Deal. I had done graduate work when progressive history, with its focus on a continuing conflict between liberal reformers and entrenched business interests, was still dominant. 6 But I had subsequently followed the attack on this view, as carried by historians stressing a consensual core in America's evolution, "pluralists" emphasizing interaction between numerous interest groups, and would-be rehabilitators of the "robber 5 Paul Merkley, "Review of The New Deal and the Problem of Monopoly," Canadian Historical Review, 48 (March 1967): 89. 6 Among the most influential works of progressive history were Charles A. and Mary R. Beard, The Rise of American Civilization, 2 vols. (New York: Macmillan, 1927); Vernon Parrington, Main Currents in American Thought, 3 vols. New York: Harcourt, 1927-1930); and Arthur M. Schlesinger, New Viewpoints in American History (New York: Macmillan, 1922). Progressive interpretations of New Deal reform were set forth in Basil Rauch, The History of the New Deal, 1933-1938 (New York: Creative Age, 1944); Mario Einaudi, The Roosevelt Revolution (New York: Harcourt, Brace, 1959); Arthur M. Schlesinger, Jr., The Age of Roosevelt, 3 vols. (Boston: Houghton Mifflin, 1957-1900); and John D. Hicks, "The Third American Revolution," Nebraska History, 36 (1955): 227-245.

XX

INTRODUCTION TO THE 199

5

EDITION

barons" featured in progressive writing. 7 I had followed as well the tendency of those who still embraced the progressive framework to move from praise of New Deal achievements to a growing emphasis on its shortcomings, timidity, and failure to realize professed ideals. 8 And some of this interpretive debate clearly affected what I had to say in the book. I saw myself, and was seen by others, as breaking with the progressive interpretation, particularly in showing how New Dealers and business leaders were divided among themselves, how cultural and ideological divisions sometimes explained more than economic ones, and how New Deal politics served as well as curbed special interests and thereby helped to undercut and frustrate the realization of ideals articulated in New Deal economic thinking. Two other challenges to the progressive framework had also emerged by the mid-196os and would soon be producing major additions to the literature of American reform and business-government relations. One was an "organizational" or "neo-institutional" school that saw 7 Of particular significance were such works as Louis Hartz, The Liberal Tradition in America: An Interpretation of American Political Thought Since the Revolution (New York: Harcourt, Brace, 1955); Daniel J. Boorstin, The Genius of American Politics (Chicago: The University of Chicago Press, 1953); Seymour Martin Lipset, Political Man (Garden City, N.Y.: Doubleday, 1960); Robert A. Dahl, Pluralist Democracy in the United States: Conflict and Consent (Chicago: Rand McNally, 1967); Lee Benson, Merchants, Farmers, and Railroads: Railroad Regulation and New York Politics, 185o-1887 (Cambridge: Harvard University Press, 1955); Allan Nevins, Study in Power: John D. Rockefeller, Industrialist and Philanthropist (New York: Scribner's, 1953); Julius Grodinsky, Jay Gould: His Business Career, 186r-1892 (Philadelphia: University of Pennsylvania Press, 1957); and Thomas C. Cochran, The American Business System: A Historical Perspective, 1900-1955 (New York:

Harper & Row, 1957). 8 This seemed apparent, for example, in works like James M. Burns, Roosevelt: The Lion and the Fox (New York: Harcourt, Brace, 1956); William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal (New York: Harper & Row, 1963); Sidney Fine, The Automobile under the Blue Eagle (Ann Arbor: University of Michigan Press, 1963); Bernard Sternsher, Rexford G. Tugwell and the New Deal (New Brunswick: Rutgers University Press, 1964); and David E. Conrad, The Forgotten Farmers: The Story of the Sharecroppers in the New Deal (Urbana: University of Illinois Press, 1965). XXI

INTRODUCTION TO THE 199

5

EDITION

both liberal reform and business consolidation as parts of a search for a new and more rational bureaucratic order, built around managerial perspectives and values. 9 The other was a "corporate liberal" interpretation associated with the rise of a new scholarly left and viewing liberal reform as the work of a corporate elite that had long since captured control of state policy and closed the door to reform options constituting any real threat to the existing corporate order. 10 Of these challenges I was aware. But beyond some thought about the New Deal as a promoter of economic organization, along the lines sketched in an insightful 1964 essay by Richard Kirkendall, 11 I had not taken much account of these interpretational innovations in putting together the final drafts of The New Deal and Monopoly. It was only later, when the interpretive innovators began using and citing the book and I had moved on to a study of Hooverian economic policy, that I began serious consideration of the 9 The foundations of the school were laid by such works as Samuel P. Hays, The Response to Industrialism, 1885-1914 (Chicago: The University of Chicago Press, 1957); Alfred D. Chandler, Jr., Strategy and Structure: Chapters in the History of Industrial Enterprise (Cambridge: MIT Press, 1962); and Robert H. Wiebe, Businessmen and Reform: A Study of the Progressive Movement (Cambridge: Harvard University Press, 1962). On its development by 1970, see Louis Galambos, "The Emerging Organizational Synthesis in Modern American History," Business History Review, 44 (Autumn 1970): 279-290. 10 The term "corporate liberal" was first used by Martin J. Sklar in "Woodrow Wilson and the Political Economy of Modern United States Liberalism," Studies on the Left, 1 (196o): 17-47· On the emergence of the interpretive outlook, see Jonathan M. Wiener, "Radical Historians and the Crisis of American History, 1959-1980," Journal of American History, 76 (September 1989): 399-434; and Irwin Unger, "The 'New Left' and American History: Some Recent Trends in United States Historiography," American Historical Review, 72 (July 1967): ll37-1263. 11 Richard S. Kirkendall, "The Great Depression: Another Watershed in American History?" in John Braeman, Robert Bremner, and Everett Walters, eds., Change and Continuity in Twentieth-Century America (Columbus: Ohio State University Press, 1964). Like Kirkendall, I had been influenced in this regard by John Kenneth Galbraith, American Capitalism: The Concept of Countervailing Power (Boston: Houghton Mifflin, 1952), and Kenneth E. Boulding, The Organizational Revolution: A Study in the Ethics of Economic Organization (New York: Harper & Row, 1953).

xxu

INTRODUCTION TO THE 199

5

EDITION

fit between my portrayal of New Deal policy and the new organizational and corporate-liberal frameworks. 12 In the late 196os and the decade of the 1970s, much of the work of the organizational school continued to focus on an "organizational revolution" in the American economy that had taken place in the late nineteenth and early twentieth centuries and set the stage for bureaucratic government, managerial social organization, and national mobilization during World War I. This was the central theme, for example, in Robert Wiebe's Search for Order in 1967; its accompanying "managerial revolution" became the subject of Alfred Chandler's Visible Hand a decade later; and these same developments provided the interpretive anchor for such monographic works as Louis Galambos's Competition and Cooperation, Melvin Urofsky's Big Steel and the Wilson Administration, Robert Cuff's War Industries Board, and Burton Kaufman's Efficiency and Expansion. 13 The school's adherents were slow to fit the New Deal experience into their framework. But as early as 1955 Richard Hofstadter had stressed the managerial side of New Deal 12 This was apparent by the time that I wrote "The New Deal and Business," published in John Braeman, Robert H. Bremner, and David Brody, eds., The New Deal: The National Level (Columbus: Ohio State University Press,

1975). 13 The full citations are Robert H. Wiebe, The Search for Order, 1877--1920 (New York: Hill & Wang, 1967); Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge: Harvard University Press, 1977); Louis Galambos, Competition and Cooperation: The Emergence of a National Trade Association (Baltimore: The Johns Hopkins University Press, 1966); Melvin Urofsky, Big Steel and the Wilson Administration (Columbus: Ohio State University Press, 1969); Robert D. Cuff, The

War Industries Board: Business-Government Relations During World War I (Baltimore: The Johns Hopkins University Press, 1973); and Burton I. Kaufman, Efficiency and Expansion: Foreign Trade Orqanization in the Wilson Administration, 1913--1921 (Westport, Conn.: Greenwood, 1974). Other important titles were Jerry Israel, ed., Building the Organizational Society: Essays on Associational Activities in Modern America (New York: Free Press, 1972); Stephen E. Ambrose, ed., Institutions in Modern America (Baltimore: The Johns Hopkins University Press, 1967); and Edwin J. Perkins, ed., Men and Organizations: The American Economy in the Twentieth Century (New York: Putnam's, 1977). XX Ill

INTRODUCTION TO THE 199

5

EDITION

action. 14 And once it was shown that progressivism had also had its managerial core, linkages could be made and the New Deal seen as a continuing search for ordering and coordinative mechanisms. It could, argued Chandler and Galambos in 1970, be seen as a response to massive coordinative failures brought on by the way that large-scale economic organizations had developed in modern America. 15 By the end of the 1970s such an interpretation of New Deal reform had also gained other adherents. Otis Graham, for example, took positive note of it in summarizing the state of New Deal scholarship for the 1974 meeting of the Organization of American Historians. He urged historians of the period to focus less on business resistance to New Deal regulation, more on "an important giant step toward the interlock of private and public institutions"; 16 and he made his own interpretive contributions to such a perspective in studies of how America's organizational development had both rendered planning necessary and frustrated the realization of planning ideals. 17 By this time, I had also become a convert. I had found the perspective useful in making 14

See the section entitled "The New Departure" in his Age of Re{onn: From

Bryan to F.D.R. (New York: Vintage Books, 1955). 15 Alfred D. Chandler, Jr., and Louis Galambos, "The Development of Large Scale Economic Organizations in Modern America," Journal of Economic History, 30 (March 1970): 201-217. Subsequently, Galambos also sought to document the growth of a "corporate culture" that helped to explain the relative lack of hostility toward big business during the Great Depression. See his The Public Image of Big Business in America, IBBo-1940: A Quantitative Study in Social Change (Baltimore: The Johns Hopkins University Press, 1975). 16 0tis L. Graham, Jr., "The Era of the New Deal," paper given at the 1974 meeting of the Organization of American Historians, p. 21. See also his "The Age of the Great Depression, 1929-1940," in William H. Cartwright and Richard L. Watson, eds., The Reinterpretation of American History and Culture (Washington, D.C.: National Council for the Social Studies, 1973). 17 Otis L. Graham, Jr., "The Planning Ideal and American Reality: The 1930s," in Stanley Elkins and Eric McKitrick, eds., The Hofstadter Aegis: A Memorial (New York: Knopf, 1974): 257-299; and Toward a Planned Society: From Roosevelt to Nixon (New York: Oxford University Press, 1976).

XXIV

INTRODUCTION TO THE 199

5

EDITION

sense of business and governmental initiatives in the 1920s, especially those associated with Herbert Hoover.18 And in 1975 I published an essay on "The New Deal and Business," in which I tried to combine the insights of the organizational interpretation with the stories of cultural conflict and competing designs for economic order that I had told in The New Deal and Monopoly. 19 In addition, I became involved in a project intended to produce a multi-volume history of twentieth-century America as seen from an organizational perspective, and the result, by 1980, was three volumes in which John Chambers reinterpreted the progressive era, I dealt with the 1917-1933 period, and Gerald Nash stressed the organizational initiatives associated with the New Deal and World War II. 20 The organizational synthesis, however, also had its critics. In the eyes of some, it involved an economic and technological determinism that masked the extent to which organization-building had been the outcome of social and political struggles in which some groups had been winners and others losers. In the eyes of others, its stress on a search for order masked the tendency of many organizational initiatives to produce a growing pluralism rather than machinery for centralized control. And in the eyes of still others, it exaggerated the roles 18

See, for example, "Secretary Hoover and the Bituminous Coal Problem,

192.1-192.8," Business History Review, 42. (Autumn 1968): 2.47-2.70; and "Her-

bert Hoover, the Commerce Secretariat, and the Vision of an 'Associative State,' 192.1-192.8," Tournai of American History, 61 Oune 1974): 116-140. 19 Ellis W. Hawley, "The New Deal and Business," in John Braeman, Robert H. Bremner, and David Brody, eds., The New Deal: The National Level (Columbus: Ohio State University Press, 1975), so-82.. 20 Entitled the St. Martin's Series in Twentieth-Century United States History, the series included John Whiteclay Chambers II, The Tyranny of Change: America in the Progressive Era, 1900-1917 (New York: St. Martin's, 198o); Ellis W. Hawley, The Great War and the Search for a Modern Order: A History of the American People and Their Institutions, 1917-1933 (New York: St. Martin's, 1979); and Gerald D. Nash, The Great Depression and World War II: Organizing America, 1933-1945 (New York: St. Martin's, 1979). XXV

INTRODUCTION TO THE 199

5

EDITION

of technocratic elites and impersonal forces while understating those played by ordinary people, traditional owners, narrowly organized interest groups, and the anticorporate resistance. 21 In time, moreover, I came to see the validity in some of the criticism. In 1992 I tried to take it into account in a revised edition of my book on the period from 1917 to 1933;22 and if I were rewriting The New Deal and Monopoly today, I would probably apply the framework developed by organizational history with more caution and qualifications than I would once have done. As I now see it, the book contains much that supports the critics' points about contested terrain, an expanded pluralism, and the strength of the anticorporate resistance. The other interpretive school having a similar impact on the post-1960 literature of liberal reform and business-government relations was that emerging from the new scholarly left and its belief that a corporate elite seeking to use the state for its own regulatory purposes was the driving force behind reform activity. This view had its origins in the late 1950s and early 196os, particularly in the work of such scholars as C. Wright Mills, 21

A sampling of such critiques would include those in David F. Noble,

America by Design: Science, Technology, and the Rise of Corporate Capitalism (New York: Oxford University Press, 1977), 321-324; Alan Dawley, Struggles for Justice: Social Responsibility and the Liberal State (Cambridge: Harvard University Press, 1991), 8-