Great Depression (U.S.)

The economic crisis of the 1930s prompted a major reassessment of the relationship between the state and the economy in the United States. Franklin D. Roosevelt's New Deal (1933–1941) expanded welfare provision, orchestrated a massive program of public works, introduced a swath of new regulatory agencies, and significantly empowered organized labor. This, then, was a period of significant political and ideological adjustment, but it was an adjustment characterized by paradox, ambivalence, and uncertainty, particularly in relation to the politics of consumption.

The collapse of the U.S. economy following the Wall Street Crash in October 1929 was sudden and shocking. By mid-1930, the economy was at a virtual standstill. As David Kennedy explains, when Franklin D. Roosevelt entered the White House in March 1933, the gross national product had dropped to half its 1929 level. A quarter of the workforce, meanwhile, was unemployed. And yet, paradoxically, during the Great Depression, the idea that consumption—and consumers—held the key to national recovery gained rather than lost currency. For example, the main pillar of early New Deal industrial policy, the ill-fated National Recovery Administration (NRA), was predicated precisely on the notion that economic revival required the effective harnessing of mass purchasing power. Despite this, the New Deal was never able to tackle the problem of underconsumption in decisive fashion. At the root of the Roosevelt administration's incoherent response was its failure to reconcile the competing economic visions of planners, who wanted to embrace large-scale solutions, with those of more producer-oriented critics of monopoly, who believed that economic bigness endangered American democracy. According to Ellis Hawley, ambivalence over how to manage the economy bedeviled public policy throughout the Depression decade.

It was the shock of war that ultimately brought this era of economic ambivalence to an end. Alan Brinkley reports that by the mid-1940s, the New Deal state, having largely retreated from the more radical proposals to restructure the U.S. economy it had countenanced in the early 1930s, was committed to a consumer-oriented approach. This strategy involved combining modest use of Keynesian fiscal management with a commitment—albeit limited in comparison to those of Scandinavian and some western European nations—to the welfare state. Thereafter, doubts about the capacity of the market and of large-scale capitalist institutions to deliver prosperity—which had been significant during the early New Deal—did not resurface for a generation, with the onset of malaise and stagflation in the 1970s.

The Great Depression was an age of fear and insecurity. Innovations in consumer credit and the rise of the chain store meant that in the 1920s, more Americans than ever before had experienced the benefits of mass production and consumption. Between 1920 and 1930, the number of American households with a washing machine tripled from 8 percent to 24 percent. Similarly, the automobile completed its journey from luxury to necessity: only a quarter of households had a car in 1920; by 1930, the figure was as high as 60 percent (Zunz 1998, 84). When it came, then, the Great Depression delivered a particularly hard blow to middle-class Americans who, encouraged by social engineers and by the burgeoning marketing and advertising industries, were increasingly defining themselves in terms of their ability to consume.

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