The Great Depression
Summary & Analysis
Radical Alternatives to a Collapsing System
In retrospect, we know that during the Great Depression the American people never rose up en masse to demand the overhaul—much less overthrow—of their long-established system of democratic capitalism, even though that system largely failed to relieve the miseries of the Depression for more than a decade.
In retrospect, we know that most meaningful long-lasting reform that emerged from the crisis of the Great Depression came from Franklin D. Roosevelt's New Deal, which permanently enlarged the role of the federal government in American society and tempered, for half a century, the volatility of the free market.
At the time, however, it was not at all clear that the New Deal marked the outer limit of possible socio-political change. The structural breakdown of the American system led many Americans to embrace much more radical alternatives to the status quo. And while none of those radical alternatives were ever fully realized (and many of them seem downright quixotic in hindsight), they did profoundly alter the boundaries of political possibility while influencing the direction of the New Deal.
American Communists: From Sectarianism to Popular Front
For Communists, the Great Crash of 1929 and its bleak aftermath seemed definitive proof of Karl Marx's assertion that capitalism contained within itself the seeds of its own destruction. While Communists hoped (and most everyone else feared) that the Great Depression would lead to a proletarian uprising, the revolution never materialized.
Always a tiny minority in American society, the Communists weakened their position further through their own rigid adherence to counterproductive doctrine. Until 1935, the Communist Party USA (CPUSA), following the direction of the Communist International in Moscow, insisted that the greatest threat to worldwide workers' revolution came from the false promise of other liberal and left-wing groups. Thus throughout the early years of the Depression, American Communists devoted an inordinate amount of their time and resources to attacking New Dealers, Socialists, Wobblies, American Federation of Labor trade unionists, Lovestonites, Musteites, and other obscure groups of non-Communist left-wingers as "social fascists." The average American worker—who surely couldn't distinguish a Musteite from a Muscovite if his life depended on it—found nothing appealing in the Communists' extreme sectarianism; by 1934, despite the seemingly favorable circumstances for recruitment created by the Depression, the CPUSA still had fewer than 30,000 members nationwide.26
After 1935, however, international Communist doctrine changed. Rather than denouncing non-Communist liberals as "social fascists," Communists would seek to make common cause with them under the banner of the "Popular Front." The new strategy freed American Communists to work with New Dealers and trade unionists, which allowed the CPUSA to achieve the widest influence in its history. Communist activists took up leading roles in organizations defending civil rights and civil liberties, advocating friendship with the Soviet Union, representing the unemployed, and—especially—organizing the huge new unions of the CIO (Congress of Industrial Organizations). While the Communist Party never gained a mass following in the United States, and Americans never came anywhere close to Red revolution, the Popular Front did allow the Communists to achieve a wider influence in American society than ever before or since.
"Bring Back Some of that Grub!"
In the 1930s, the Communists were far from alone in advocating the redistribution of wealth from the haves to the have-nots. Bombastic Louisiana Democratic Senator Huey P. Long shot to national prominence by promising to "Share Our Wealth." Long sold his simple vision—which called for limiting wealthy individuals' fortunes to a few million dollars and redistributing the "excess" to the masses—with a uniquely folksy, if demagogic, personal style.
Long memorably likened the Depression-era economy to a Louisiana barbecue: "How many men," he asked, "ever went to a barbecue and would let one man take off the table what's intended for nine-tenths of the people to eat? The only way you'll ever be able to feed the balance of the people is to make that man come back and bring back some of that grub that he ain't got no business with! Now we got a barbecue. We have been praying to the Almighty to send us a feast. We have knelt on our knees morning and nighttime. The Lord has answered the prayer. He has called the barbecue. 'Come to my feast,' He said to 125 million American people. But Morgan and Rockefeller and Mellon and Baruch have walked up and took 85 percent of the victuals off the table! Now, how are you going to feed the balance of the people? What's Morgan and Baruch and Rockefeller and Mellon going to do with all that grub? They can't eat it, they can't wear the clothes, they can't live in the houses... when they've got everything on God's loving earth that they can eat and they can wear and they can live in, and all that their children can live in and wear and eat, and all of their children's children can use, then we've got to call Mr. Morgan and Mr. Mellon and Mr. Rockefeller back and say, come back here, put that stuff back on this table here that you took away from here that you don't need. Leave something else for the American people to consume. And that's the program."27
The program, crude as it was, may have been entirely unrealistic, but that didn't stop it from becoming wildly popular. By 1935, Long claimed that more than 7.5 million Americans subscribed to the mailing lists of the 27,000 Share Our Wealth clubs scattered throughout the country.28 Long, who criticized the New Deal as too conservative, pondered an independent run for the White House in 1936—and Democratic polls indicated he might win as many as three or four million votes, potentially costing President Roosevelt his re-election. Some even feared that Huey Long's populism and personality cult made him a likely candidate to become an American fascist dictator; Roosevelt called him one of the two most dangerous men in the country.
Huey Long's left-populist challenge to Roosevelt ended on 8 September 1935, when he was assassinated inside the Louisiana state capitol by the son-in-law of a local political enemy. A faint echo of Long's Share The Wealth program survived, however, in Roosevelt's "Wealth Tax" of 1935, which boosted the highest tax rate for the richest Americans to a nearly confiscatory 79%.
EPIC Threat In California
In 1934, the New Deal received another major challenge from the left—this time in California. Upton Sinclair—a writer remembered today mainly as the author of The Jungle, the classic 1906 muckraking exposé of the meatpacking industry—was a lifelong Socialist who became frustrated with the New Deal's inability to end the Depression and founded EPIC (End Poverty In California) to pursue more radical solutions. Rather than putting the unemployed on relief, Sinclair proposed to put them to work within a state-organized "production-for-use" economy totally independent from the capitalist marketplace. Under Sinclair's communitarian scheme, the state would take over idle farms and factories, allowing the jobless to grow their own food or produce their own clothing and other goods. Any surplus could be traded, through a system of barter, only for other goods produced within the system. It was a shocking commentary on the state of the capitalist economy that Sinclair's scheme—which wasn't really much different from a pre-modern barter system—was seen by many Californians as a visionary solution to modern America's problems.
Registering as a Democrat, Sinclair ran for Governor on the EPIC platform in 1934, and pulled off a huge, surprising victory in the primary election. Considered the front-runner in the general election, Sinclair was subjected to intense attacks from both Republicans and Democrats who feared that his victory would effectively remove California from the capitalist orbit and pave the way for Communism. (Meanwhile, Sinclair was also attacked by the Communists themselves, who stuck to their sectarian policy by attacking EPIC as "social fascism.") Opponents of EPIC—including many New Dealers who reluctantly backed arch-conservative Republican Frank Merriam over the old muckraker—claimed that if Sinclair were elected, California would be overrun by millions of hoboes looking for a free lunch and that Sinclair "concealed the communistic wolf in the dried skin of the Democratic donkey."29
Sinclair lost the general election, drawing 880,000 votes to Merriam's 1.1 million. Still, considering the radicalism (and even utopianism) of the EPIC platform, Sinclair's vote tally was remarkably high; if 70,000 Californians had switched their votes in Sinclair's favor, California would have embarked upon a socio-economic experiment unlike anything in American history.
Pensioners to the Rescue: The Townsend Plan
California was also the origin of another radical scheme that swept the nation towards the latter end of President Roosevelt's first term—the Townsend Plan. Francis Townsend, 66 years old, was a retired country doctor. Believing that the two fundamental problems underlying the Depression were too little consumer spending and too many workers seeking too few jobs, Townsend proposed a national sales tax to fund a $200 monthly pension for all Americans over age 60 who pledged not to work and to spend the full amount within the month. The scheme would remove the elderly from the work force, opening up jobs for younger workers, while the seniors' mandatory spending of $200 a month each would create the demand for consumer goods needed to get the economy going again.
Like Huey Long's Share The Wealth program, the Townsend Plan was politically appealing but economically preposterous; funding Townsend's generous pensions for the aged would have absorbed fully half the national income!30 Still, like Share The Wealth, the Townsend movement attracted millions of boosters throughout the country. As many as 25 million Americans signed petitions demanding that their representatives pass the Townsend Plan as a federal law.
In the end, the Townsend Plan was pre-empted by FDR's own Social Security legislation, which passed in 1935 and provided federal pensions to the elderly, at least in part to head off Townsend's momentum. However, Social Security benefits initially were only about one-tenth of those called for by Dr. Townsend, and Townsend Clubs remained active in demanding more generous old-age pensions well into the 1950s.