Arranged Alliance: Business and the New Deal's Cross-Class Coalition

Peter Swenson

IPR working papers from Institute for Policy Resarch at Northwestern University

Abstract: The role of business interests in fighting or supporting core New Deal social policy reforms of the 1930s remains a highly contested issue across the disciplines of history, sociology, and political science. Some argue that capitalists were entirely hostile and therefore simply ineffective in blocking reforms, while others maintainthat capitalist support and pressure were decisive. This paper shifts the focus to business support after passage, presenting evidence that New Deal politicians sought to arrange and expected a congenial alliance of business and popular interests after passage. Scattered but significant business support signalled in advance the feasibility of such an alliance to New Deal reformers who believed that the regulatory logic of fair labor standards, old age and unemployment insurance, and even protection of union organizing and bargaining rights would appeal to businessmen chronically disturbed by the destabilizing labor practices of "chiselers," or cut-throat competitors in product markets. Thus would the reforms offer market security to many capitalists along with social security for working classes. These same reformers' experience from progressive reforms earlier in the century led them to discount organized business opposition and to believe that a robust cross-class alliance would secure the reforms once the social emergency that mobilized intense popular and electoral pressure had passed. The paper concludes with critiques of other theories about the New Deal associated with Theda Skocpol, Fred Block, Tom Ferguson, and Colin Gordon, showing how the cross-class alliance analysis addresses problems with their logic and historical evidence.

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