The Impact of the New Deal on Economic Liberties During the Great Depression

Abstract

The Great Depression is among the most consequential periods in American history. The collapse that began in 1929, and the economic, social, and political consequences of the subsequent decade, have been an enormously popular subject for historians and economists. Yet, despite this significant scholarly achievement, curiously little research has been advanced at the intersection of President Franklin D. Roosevelt’s New Deal policies and economic liberties. Through a review of the economic history of the Great Depression, and in the context of the contemporary political environment and legal framework, this paper seeks to understand the impact of FDR’s interventionist economic policies on economic liberties, principally freedom of contract and private property. The Roosevelt administration used deliberately crafted war analogies to draw upon and expand pre-existing emergency powers for political and economic aims. This expansion of a national security justification into the economic realm clashed with a decades-long period of heightened protection for economic liberties. The result was a significant increase in centralized and arbitrary executive power outside of the wartime environment at the expense of economic liberty. Furthermore, the exercise of these policies established and expanded political and legal precedents that governments would not hesitate to use in the future—and continues unabated today.