Great Depression in a Constitutional Context

It seems like, with time, events and conditions that led to the Great Depression have been reduced in the minds of many to the stock market crash in 1929. This is a very simplified and ultimately incorrect view on the situation since at the time of the crash, before mutual funds were invented, even fewer people owned stock than do nowadays (Henretta, Brody, & Dumenil, 2006). Of much more importance was overproduction in virtually every industry and in agriculture, poor management of the nation's thousands of banks, and the money panic that followed immediately after the stock market crashed.

Similarly, the eventual economic recovery is generally credited to Franklin D. Roosevelt's New Deal, and only a passing mention is given to the dramatic increase in demand for labor, agricultural supplies, and manufactured goods that followed the United States' entry into World War II. Would the nation have recovered its economic health without the war-caused production boom? Probably so, although the road would have been much longer and problems more widespread then they actually were. Did Roosevelt's innovations, and specifically the dramatic increase in federal control over the nation's business practices, add to or subtract from the American concept of liberty? Everyone holds their own opinion to this regard, but based on the Foner's (1998) presentation of the concept of American freedom, it seems that by applying unprecedented measures to fix the immediate economic crisis, Roosevelt's administration ultimately took away from American freedoms and thus changed the country for the worse.

It is difficult to argue against some sort of changes being needed when the Great Depression hit. The nation's economy was suffering from underspending, as almost half of the working population lived at or below the poverty levels and did not have the means to spend on consumer items. This resulted in a wide disparity between supply and demand and meant that manufacturers would cut production until getting rid of accumulated inventories. At the same time, business owners did not particularly care for the working conditions or for improving wages because of the similarly wide disparity between labor supply and demand, with supply being much higher. Roosevelt's New Deal programs provided for a measure of economic security of the working people, but at the same time took away the freedom of every American to run their business the way they wanted to. It also undercut the authority of the states by giving the federal government more regulatory powers over commerce in individual states - a measure going against original constitutional intentions, which were for the federal government to regulate only interstate commerce. And even if taken at its word as intended to provide "freedom from economic insecurity" (Foner, 1998), the New Deal programs have failed since the political realities of the time did not allow them to provide such freedom indiscriminately.

Were there measures that, if undertaken, would have alleviated the hardships of the Great Depression without the socialistic aspects of the New Deal? Limiting immigration and offering economic incentives to businesses that paid better wages and provided better working conditions seem like two of the most obvious paths. It may have taken longer to recover economically, but American freedoms would have been safe.

References:
Foner, E. (1998). The Story of American Freedom. New York: W. W. Norton & Co.
Henretta, J. A., Brody, D., & Dumenil, L. (2006). America: A Concise History. Boston, MA: Bedford/St. Martin.