THE MAN NEWT GINGRICH DESCRIBED as the greatest President of the 20th century distrusted the states, was suspicious of Big Business and believed that government was the best instrument for building a morally better world. Franklin Delano Roosevelt's own contract with America pledged that government would help the one-third of the nation that was "ill-housed, ill-clad and ill-nourished."
In the Age of Newt, the Washington evoked in Alan Brinkley's masterly The End of Reform: New Deal Liberalism in Recession and War (Alfred A. Knopf; 371 pages; $27.50) seems like another planet. In the late 1930s and '40s, the word liberal was a badge of honor, not an epithet. Federal officials castigated "economic royalists," denounced predatory monopolists and seemed to regard the words free enterprise as a cloak for corporate exploitation. Big Business, not Big Government, was seen by Americans as the source of economic injustice.
The End of Reform is a dense, rich intellectual history of how the antimonopolist reform impulses of the early New Deal--in which modern industrial capitalism was seen as a flawed system that needed to be repaired--gave way to a rights-based liberalism that accepted capitalism as it was and concentrated instead on civil rights and a full-employment economy. The subtext of Brinkley's book is that the unremembered battles fought by idealistic liberal bureaucrats in the '30s and '40s are part of a never ending American struggle between the conflicting national impulses that Alexis de Tocqueville described as communitarianism versus individualism.
The book comes at a time when Republicans are making a fetish of balanced budgets, tilting at the last remnants of the New Deal and threatening to pass laws that limit the ability of ordinary citizens to sue companies for negligence. The End of Reform is a reminder that there was a time when popular reform was not about protecting corporations from consumers but shielding consumers from corporations.
Brinkley sketches out the beginning of the era of mass consumption, recounting how America evolved from an economy driven by production to one stimulated by consumer spending. The prophet of this change was the British economist John Maynard Keynes, who preached that the way out of the U.S.'s 1937 recession was the triggering of demand, not the revival of investment. This idea was new to the industrial age, which had always followed Say's Law of Markets in asserting that production drove consumption.
F.D.R., however, proved a reluctant convert; in 1937 he was still pining for a balanced budget, something that Keynesian economists warned would turn the "Roosevelt recession" into another full-fledged depression. Roosevelt's advisers accordingly persuaded him to seek to increase consumption. The answer to the question "What can you do for your country?" became "Consume." Thrift became wasteful, shopping patriotic--laying the groundwork for the I-consume-therefore-I-am society of today.