National Recovery Administration Research Articles

Batteryman vs. The New Deal: The Life of Fred C. Perkins

The Great Depression and the New Deal remain enormously popular subjects for economists and historians. Scholars across multiple disciplines continue to devote significant resources to understanding the economic collapse that began in 1929 and the social and political consequences of the subsequent decade. Despite this remarkable scholarly achievement, curiously little research has been advanced to highlight the victims of the New Deal’s overreach. While more recent revisionist accounts of the New Deal attempt to address the negative aspects of the New Deal in broad strokes, these histories do little more than repeat a handful of anecdotal stories without any depth into the victims themselves. This three-part paper seeks to address the inadequacy of these accounts by detailing the life story of one of the New Deal’s most prominent opponents. Fred C. Perkins ran a small battery manufacturing business in York, Pennsylvania. Fred’s initial specialty was maintaining farm lighting plant batteries to provide electrical service to rural areas before widespread electrification. His story became newsworthy when he was arrested and spent 18 days in jail on a warrant for violating the minimum wage provisions of the National Recovery Administration (NRA). Perkins’s story reached the pages of major city newspapers, and he was ultimately vindicated when the Supreme Court found the NRA unconstitutional in 1935. That much of the Perkins story is repeated in many accounts of the New Deal and the NRA. This three-part paper seeks to move beyond the 15 minutes of fame to understand the life experience and legacy of Fred C. Perkins. In Part I, I explore Perkins’s early life, including his education at Cornell, his early jobs, and his family life from birth until 1933. It is not until the later part of this period that we begin to see the development of a political and economic philosophy that lays the groundwork for his opposition to the NRA and the New Deal as a whole. At the same time, Fred established his family in York County, Pennsylvania, where he would live and work for the rest of his life. In the shop behind his home in West York, Fred established the business that would be central to his story. Part II focuses exclusively on Perkins’s initial dispute with the NRA, the subsequent court case, and his eventual vindication. In Part III, I address Fred C. Perkins’s other lesser-known fights against New Deal legislation, his growing voice in Republican political circles, and the legacy of his life and business in York County by the time of his death in 1957. While Fred changed jobs and moved around quite a bit early in his life, this three-part paper is essentially a local history of Fred’s life in York. Although Fred was not from York County, his story influenced the community’s people and culture. The life of batteryman Fred C. Perkins became part of what defines York County.

Labor Dis-Unity: A 1920’s Source of Left-Wing anti-Communism

The Communist Party’s (CP) “Third Period” shift in labor policy from the Trade Union Education League (TUEL) effort of “boring from within” mainstream unions to the Trade Union Unity League (TUUL) effort to create new independent “revolutionary” unions is dismissed in much of the literature. In a close study of New York’s independent hotel workers, we see a more complex story. The CP and TUEL thwarted leftwing unionists’ efforts to organize a federation of independent, amalgamated industrial unions called the Labor Unity Council in the early 1920’s. Activists who resented the hasty directive to recreate an independent “Unity” federation of radical unions a few short years later became an early pocket of left-wing anti-communism. We also see how one union, the Amalgamated Food Workers, negotiated and resisted CP directives, as well as how its breakaway TUUL competitor, the Food Workers Industrial Union, was divisive until the New Deal National Recovery Administration labor codes forced the unions into a degree of coordination and eventually merger that preceded the CP shift toward the “Popular Front.”

From the First World War to the National Recovery Administration (1917-1935) - The Case for Regulated Competition in the United States during the Interwar Period

The experience of the war economy during the First World War in the United States reinforced the influence of arguments in favour of managed competition. By extending the principles of scientific management to the economy as a whole, this approach aimed to coordinate firms through the exchange of information, which was seen as a necessity both in terms of economic efficiency and response to cyclical fluctuations. Such a stance greatly reduced the application of competition rules. Nevertheless, the proposals that emerged during the 1929 crisis – leading to the reproduction of the war-economy experience in peacetime at the risk of steering the US economy towards the formation of cartels under the supervision of the federal government – were rejected by President Herbert Hoover, despite his defence of a model for regulated competition in the 1920s. The paradox was President Franklin D. Roosevelt’s resumption of these projects within the framework of the First New Deal. This paper deals with the arguments that were put forward to evade competition rules and explains why the Democratic administration ultimately decided to return to a resolute enforcement of the Sherman Act.

Navigating class power and inequalities: new deal liberals and the Los Angeles regional labor board, 1933-1934

ABSTRACTThis article examines how local state officials operated the Los Angeles Regional Labor Board, 1933-1934, a regional branch of the National Labor Board. Amid a surge in workers mobilizing strikes and organizing unions, which faced fierce business opposition in LA, one of the period’s most anti-union cities, local state officials discarded initial solutions to industrial conflict – solutions based on state paternalism and involved parties’ voluntary compliance – and proposed more robust state interventionist tools. Such efforts were to enhance state authority and power and forge greater class equality by accepting worker rights and limiting business prerogatives, while the officials also obsessively encouraged the economic ‘wheels be kept turning and the pulse quickened.’ Drawing on regional-based archives, we trace local officials navigating and shaping social relations, and investigate the unpredictable, everyday workings of local responses to national-level policy-making. Earlier scholarship on the period highlights the role of leaders, like FDR or Senator Wagner, or business elites crafting seemingly pro-working-class policy, alongside the accounts of structural political economy. We emphasize local state agencies tasked with policy implementation becoming sites of contention for class actors and state officials, reflecting more general patterns but also initiating institutional procedures with enduring implications for US capital-labor relations.Abbreviations: LA: Los Angeles; NLB: National Labor Board; RLB: Regional Labor Board; NLRB: National Labor Relations Board; AFL: American Federation of Labor; LACC: Los Angeles Chamber of Commerce; M&M: Merchant and Manufacturers Association; NRA: National Recovery Administration

Introduction

Introduction

Economic Planning Under Capitalism: The New Deal and Postwar France Experiments

By the beginning of the 20th century, the possibility and efficacy of economic planning was believed to have been proven by totalitarian experiments in Germany, the Soviet Union, and, to a lesser degree, Fascist Italy; however, the possibilities and limitations of planning in capitalist democracies was unclear. The challenge in the United States in the 1930s and in postwar France was to find ways to make planning work under capitalism and democratic conditions, where private agents were free to not accept its directives. This paper begins by examining the experience with planning during the first years of the New Deal in the United States, centered on the creation and operation of the National Recovery Administration (NRA) and the Agricultural Adjustment Administration (AAA), and continues with a discussion of the French experience with indicative planning in the aftermath of World War II. A digression follows, touching on the proximity between the matters treated in this paper and Keynes’s view that macroeconomic stabilization could require a measure of socialization of investments, following James Tobin’s hunch that French indicative planning, as well as some social democrat experiences in Northern Europe, could be playing precisely that role. The paper concludes by identifying the lessons one can draw from the two experiences.

FDR’s New Deal: An Alternative View on Policies and Their Results

Franklin D. Roosevelt’s New Deal is usually treated as an example of successful government regulation of the economy. After Roosevelt’s death, his image was glorified. Until recently, only a few scholars knew the facts forming a completely different image of the New Deal. In this paper, the New Deal programs (regulating industry, agriculture, labor market and financial markets, started by Herbert Hoover) are investigated as a result of a policy which extended the Great Depression. The main lesson is that any attempts to introduce a “New New Deal” can only create negative consequences for the economy. The article examines the actions of the Administrations created by Roosevelt during the Great Depression, which were regulating minimum wages, prices, and level of production. A special role was played by the National Recovery Administration (NRA), which had unprecedented power, combining the executive, legislative and judicial branches of the government. It was an unusually interventionist policy for the United States, which resulted in very slow and painful recovery of the US economy. The Great Depression began as a usual phase of the economic cycle, caused by the credit expansion by the Federal Reserve System, which increased the money supply by 62% from 1921 to 1929. It would have ended in a year, like the crisis of 1921, had it not been for Hoover’s and Roosevelt’s interventionist policies. The American people agreed to the policy of centralization during the Great Depression, because public opinion was prepared for this by intellectuals of the Progressive Era. They were able to convince the public that the Era of the active role of the State had come to the United States. Intellectuals were using their authority to fuel the destructive programs of the New Deal. The glorification of Roosevelt’s image is largely a result of an alliance between the Big State and intellectuals.

The Associational State: American Governance in the Twentieth Century by Brian Balogh

Reviewed by: The Associational State: American Governance in the Twentieth Century by Brian Balogh Bell Julian Clement THE ASSOCIATIONAL STATE: American Governance in the Twentieth Century. By Brian Balogh. Philadelphia: University of Pennsylvania Press. 2015. This volume assembles half a dozen essays published over the past generation by historian Brian Balogh limning the evolution of the field of American Political Development. Political historians have, in Balogh's nomenclature, moved away from an older "Progressive synthesis," which cast American politics as a function of "activist government" versus "limited government" antagonisms, toward a new "associational" synthesis, in which scholarly attention focuses on exploration of the state itself as a potent and interested actor in policy matters. Attempts to understand the development of the American state, asserts Balogh, must reckon with the fact that American abhorrence of powerful central government is matched by American demand for energetic public policymaking. The key task confronting students, thus, is to explore the partnerships—among the federal government, market actors, organized interest groups, and the professions—that make possible a response to this apparently self-contradictory desire for activist, inconspicuous, governance. Balogh argues that the associational state pattern, far from being new, is firmly rooted in the nineteenth century. The American state consistently has expanded through "a series of compromises brokered between central authority and local administration . . . a host of private and voluntary partners that blur the line between public and private spheres." (40) Twentieth-century associational state development was simply a continuation, one that "accelerated a long-standing American tradition forged over the course of the nineteenth century." (32) Associational state patterns are not only venerable; they are persistent. Balogh challenges the notion that the associational state met its demise with the Supreme Court's 1935 rejection of the National Recovery Administration. Despite that failure, "the New Deal state dramatically expanded its reach into the political economy . . . through a mechanism that blended state, local, and private associations." (155) Similarly, Balogh disputes the view that Lyndon Johnson's Great Society destroyed pluralism, the central mechanism of the associational state, by drowning the concept of shared national interest in seas of individual rights. Although the Great Society did indeed "democratize" politics, "new entrants into the policy sweepstakes" nevertheless "had to play by pluralist rules." (198) Several of these essays explore particular processes of associational state expansion. One avenue of growth has been provided by state actors' partnerships with market forces, as Balogh shows with his reinterpretation of Gifford Pinchot's turn-of-the-century successes at the U.S. Forest Service. In place of the standard telling, that Pinchot "sought to interpose administrative discretion in place of the market" (65) Balogh argues that Pinchot succeeded because he was able to merge state goals and market means, "framing his programs in the rhetoric of the market." (65) Growth of the central state has proceeded through elaboration of the relationship between the state and organized interest groups. As illustrated by Herbert Hoover's 1928 presidential campaign's special reliance on women's organizations, state actors' partnerships [End Page 226] with interest groups "laid the groundwork for crafting public policies that expanded the scope of government to serve select (and powerful) constituencies while avoiding the always dangerous charge in America of contributing to the growth of big government." (68) The American central state also expanded via "the coevolution of federal institutions and the experts who eventually staffed them." (91) World war and Cold War "expanded administrative capacity and pushed professionals into these new positions on a national scale." (123) The federal government which emerged "not only responded to well-organized interest groups, it now had the capacity to create them . . . and to define the research agendas of a host of professional disciplines." (91) Balogh writes with an agenda. He would like to see scholarship's associational state framework displace the stale "activist state versus limited government" paradigm that still structures American public discourse and, in his view, is responsible for much of our present policy paralysis. The attention of citizens should be as focused, as is that of scholars, on "how groups organize, how they gain access to the resources necessary to organize." (138) "The battle over how these intermediary institutions...

Nowy Ład prezydenta Franklina Delano Roosevelta w oczach Wiktora Podoskiego

Nowy Ład Franklina Delano Roosevelta miał na celu powstrzymanie wielkiego kryzysu. Artykuł ma za zadanie pokazać wiedzę polskiej dyplomacji na temat programu. Jest on oparty na opracowaniu Wiktora Podoskiego Nowy ład Roosevelta. Autor był pracownikiem polskiego Ministerstwa Spraw Zagranicznych. Opisuje on realizację Nowego Ładu od 1933 do 1936 r. W artykule odzwierciedlone zostało to, jak Podoski przedstawił program oraz poszczególne ustawy. Szczegółowo ukazuje on niektóre reformy, a także największe instytucje powołane w ramach Nowego Ładu: National Recovery Administration, Agricultural Adjustment Administration, Federal Emergency Relief Administration oraz Public Works Administration. Wielu ustaw autor pominął lub tylko o nich wspomniał. Przedstawione przez niego informacje nie zawsze były niedokładne. Niektóre z reform drugiej fazy programu zostały opisane wraz z opinią autora na temat ich przyszłości. W artykule zostały również ukazane, jako podsumowanie, reformy Nowego Ładu z okresu 1936–1939.

Of Sheepdogs and Ventriloquists: Government Lawyers in Two New Deal Agencies

From the neo-Weberian literature on state-building and the political sociology of the legal profession, one might expect government lawyers to be sheepdogs, nipping at the heels of straying administrators, supplying their agencies with the bureaucratic autonomy so often missing in American government. In this working paper, prepared for "Opportunities for Law's Intellectual History," a conference sponsored by Baldy Center for Law and Social Policy at the State University of New York at Buffalo, October 10-11, 2014, I report my preliminary findings for two agencies created during the Hundred Days of Franklin D. Roosevelt's presidency, the Agricultural Adjustment Administration and the National Recovery Administration. I suggest that the neo-Weberian model tends to minimize the lawyers' agency as political actors. In particular, the New Deal lawyers' projection of their own preferences upon general statutory delegations of legislative power, which they then interpreted authoritatively, could make them less the faithful agents of their master’s voice than ventriloquists in pursuit of their own political agenda.

Coal Wars: Unions, Strikes, and Violence in Depression-Era Washington by David Bullock

 OHQ vol. 116, no. 4 ton State in 1933–1934. Because Bullock has a personal connection — his grandfather was a Roslyn miner at the time — he augments his scholarly account with a narrative, written in a style normally reserved for fiction, based on the memories of his mother, her brother, and others who lived in Roslyn at the time. Those passages are clearly identified by italics and add a fresh and emotional aspect to his grandfather’s story of trying to work, make ends meet, and get along. It is refreshing to hear not only of the combatants in the struggle but also of those who are affected by labor strife not of their making. Miners at the four mines in the Roslyn-Cle Elum coal fields near the towns of Roslyn,Ronald ,and Cle Elum belonged to the United Mine Workers of America (UMWA). Led by John L. Lewis, the UMWA was working with the Roosevelt administration to draft new policies — a code — for mining under the recently created National Recovery Administration (NRA). Those miners had been struggling for a sixhour work day and were against coal-cutting machines,which they claimed were dangerous and replaced highly skilled workers.Additionally , pay had moved from incentive (by the ton) to daily. The miners won legislation in Washington State in 1933,banning coal cutting machines, making themselves local heroes in the process. When the law took effect in early June, however, Northwestern Improvement Company (NWI), closed some mines rather than operate without the machines, idling 450 miners. When the union contract expired three weeks later,neither side was motivated to negotiate seriously as they waited for the NRA code terms. The company asked the men to work under the old contract, but the miners refused unless the idled miners were accommodated . All the mines closed. In late July,Lewis asked the miners to return to work while the NRA negotiations continued. of American culture as “a dialogue between opposing forces” (p. 247). He integrated that concept into his American history surveys, and eventually into the 1997 study Beyond Left and Right: Insurgency and the Establishment, and several volumes to follow. Readers catch glimpses of the successes and strains of a growing urban public university throughout Getting There, and Horowitz ably illustrates the fragility of contemporary universities in an era of increasingly centralized, corporately oriented administration.More impressive,however,are his references to mentors such as“Dave Noble, William A. Williams, Eugene Genovese, and Gene Wise,” scholars who shaped his thinking and kept him in touch with the educational ideals that had brought him into teaching (p. 159). Horowitz has a mind of his own, as his account of his outspoken career clearly shows. But the strength of his informative memoir is his capability to explain himself not as a lone crusader but as a defender of principles shared over time by many others. David M. Robinson Oregon State University COAL WARS: UNIONS, STRIKES, AND VIOLENCE IN DEPRESSION-ERA WASHINGTON by David Bullock Washington State University Press, Pullman, 2014. Illustrations, maps, notes, bibliography, index. 220 pages. $24.95, paper. David Bullock has documented a largely previously ignored labor struggle involving miners who worked the Roslyn-Cle Elum coal fields on the eastern slopes of the Cascades, the largest coal-producing region in Washing-  Reviews By August, Lewis ordered the miners to return to work, setting off a conflict between the UMWA and the Roslyn local, where militant leaders accused him of selling out their battles for better pay and a shorter work day. After a leader of the militant faction was elected president in October,Lewis decertified the local union and put his own man in charge. The next month an alternative union, the Western Miners Union, was formed and called a strike in April 1934. Some miners remained loyal to the UMWA,causing sometimes violent battles between neighbors including egg throwing and other harassment by strikers and their families of those they saw as scabs.Eventually there was murder, a trial, and a split in the community that persists. It is not uncommon to want to simplify history, to choose one issue when there are several interacting. This struggle was one...

Cementing the case for collusion under the National Recovery Administration

Macroeconomists have long debated the aggregate effects of anti-competitive provisions under the “Codes of Fair Conduct” promulgated by the National Industrial Recovery Act (NIRA). Despite the emphasis on these provisions, there is only limited evidence documenting any actual effects at the micro-level. We use a combination of narrative evidence and a novel plant-level dataset from 1929, 1931, 1933, and 1935 to study the effects of the NIRA in the cement industry. We develop a test for collusion specific to this particular industry. We find strong evidence that before the NIRA, the costs of a plant's nearest neighbor had a positive effect on a plant's own price, suggesting competition. After the NIRA, this effect is completely eliminated, with no correlation between a plant's own price and its neighbor's cost.

The effect of institutional regime change within the new deal on industrial output and labor markets

Markets during the New Deal operated under a number of different institutional regimes, which were marked by executive orders, the passage of various pieces of legislation, and Supreme Court rulings on their constitutionality. Specifically, we break the New Deal period into the following six regimes: the Hundred Days, the President's Reemployment Agreement, the National Recovery Administration Codes of Fair Competition, the Schechter era, the National Labor Relations Act, and the Fair Labor Standards Act. Under these various regimes industrial markets were subject to different regulations relating to hourly wage rates, hours of work, the nature of competition, and unionization. Vector Autoregressive (VAR) regressions are run using a monthly panel of employment, weekly hours worked, wage rates, prices, and output for 11 major industries. We find that key policy and legal changes were associated with large and statistically significant movements in economic variables. Furthermore, changes in institutional regimes impacted different types of industries unevenly. For example, low-wage industries saw the largest increases in wages, and drops in output, after the mandated wage increases in 1933.

Revisiting the New Deal

Revisiting the New Deal Joel Blau (bio) Michael Hiltzik . The New Deal: A Modern History. New York: Simon and Schuster, 2011. 497 pp. Photographs, notes, and index. $30.00. Michael Hiltzik's The New Deal: A Modern History has a prominent subtext. On its face, it is a very readable history of the New Deal. Look a little more closely, however, and another purpose becomes evident. Hiltzik is retracing the history of the New Deal in order to enter the fray about the proper roles of government and the private sector. He wants to show that, in the current economic crisis, as in the New Deal, the power of the federal government can be deployed to better the lives of most Americans. His argument is persuasive, but since controversy about the New Deal persists, issues of emphasis and omission often arise from the narrative. Hiltzik adopts a panoramic view of the 1930s, and what he covers, he covers well. Beginning with Brain Truster Sam Rosenman's first evocation of a "New Deal" for Roosevelt's acceptance speech at the 1932 Democratic Convention, Hiltzik paints a vivid portrait of a country whose bank closings, smokeless factories, and 25 percent unemployment rate left it teetering on the brink of total collapse. Herbert Hoover, who had mastered the science of engineering but not the art of politics, understood that the old era had died; yet as a matter of both temperament and ideology, he could only draw on the existing legislative kit. Roosevelt, by contrast, blended the confidence of the Hudson River landed aristocracy, a gift for relating to working people, and a willingness to experiment. He swept into office on a landslide. Hiltzik's history has three main narrative strengths. The first is his portrait of Roosevelt. Amplifying the pointed assessment of Oliver Wendell Holmes, Jr., that Roosevelt possessed "a second class intellect but a first class temperament," Hiltzik highlights the president's political nimbleness, his receptivity to advice spanning the full ideological spectrum of his Brain Trust, and most of all, his openness to experimentation. Often upbraided as a traitor to his class, Roosevelt had an acute sense of the possibilities for institutional evolution—what was needed to preserve the system, as well as what changes the system would tolerate. The changes the system would tolerate encompassed the alphabet soup of New Deal programs: the Agricultural Adjustment Act (AAA); [End Page 129] Federal Emergency Relief Administration (FERA); Civilian Conservation Corps (CCC); Works Progress Administration (WPA); plus Glass-Steagull regulating the banking industry; the Wagner Act recognizing a right to unionize; the Social Security Act; the Housing Act of 1937 funding the first housing projects; and the Fair Labor Standards Act (1938) establishing a minimum wage. One great irony of the New Deal is that this long list of social reforms came from a man whose basic instincts were fairly conservative. Roosevelt believed firmly in markets, hated "the dole," and enacted much of his New Deal legislation to preempt even more radical proposals. It is a cliché of American politics that elections are won at the center. Roosevelt's special talent was to govern from the center during a most tumultuous time. Hiltzik's depiction of the Brain Trust is another of the book's major strengths. In portrait after portrait, Hiltzik captures Hugh Johnson, the bombastic head of the National Recovery Administration; Raymond Moley, the advisor who soon turned into one of the New Deal's most vociferous critics; Harold Ickes, who conducted an ongoing bureaucratic war with Harry Hopkins about what he saw as profligate spending on relief projects; and Rex Tugwell, who favored government planning and defined the Brain Trust's left boundary. The interaction between these advisors—and others such as Frances Perkins, Felix Frankfurter, and Louis Brandeis—transformed every legislative debate into something more than a rational preference for one policy option over another. By showing the very human conflicts underlying the way laws are made, Hiltzik's portraits make the battles about each piece of New Deal legislation come alive. The Social Security Act epitomizes this mix of personal and policy interactions. The initial impetus for the act came from Secretary of Labor Frances Perkins, who...

The National Recovery Administration Reconsidered,orWhy the Corrugated and Solid Fiber Shipping Container Code Succeeded

The Corrugated and Solid Fiber Shipping Container Industry Code was one of the only successful codes in the National Recovery Administration (NRA). Compliance was high. It increased production, wages, employment, and product diversity. NRA administrators marveled at its success. Why? And why have historical and rational-choice institutionalists, studying the NRA, overlooked the container code? This paper provides two answers: one microbehavioral, the other macrohistorical. At a micro level, it is impossible to understand the container code with rational-choice theory. It was successful not because it coordinated and enforced collective action, but because it organized “collaborative learning.” The code showed manufacturers how to compete over productivity and product diversity instead of volume. At a macro level, historical institutionalists miss the movement that spawned the container code, because they search in vain for liberal corporatism and state autonomy. Instead, this paper shows how the Federal Trade Commission (FTC) led a movement of cost accountants, trade associations, and peak business associations in an effort to channel competition from predation into improvement in products and production processes through “developmental trade associations.” The container code drew its personnel and practices from this project. In order to make sense of the container code, I introduce a novel theory of institutions, called “creative syncretism.”

A Theory of Entangled Political Economy, with Application to TARP and NRA

The recent financial crisis has provoked a raft of contending claims as to whether the cause of the crisis is better attributed to market failure or political failure. Such claims are predicated on a presumption that markets and polities are meaningfully separate entities. To the contrary, we argue that contemporary arrangements create an entangled political economy that renders theorizing based on separation often misleading. Within this alternative framework of entangled political economy, we illuminate both the recent Troubled Assets Relief Program (TARP) and the New Deal’s National Recovery Administration (NRA).

A theory of entangled political economy, with application to TARP and NRA

The recent financial crisis has provoked a raft of contending claims as to whether the cause of the crisis is better attributed to market failure or political failure. Such claims are predicated on a presumption that markets and polities are meaningfully separate entities. To the contrary, we argue that contemporary arrangements create an entangled political economy that renders theorizing based on separation often misleading. Within this alternative framework of entangled political economy, we illuminate both the recent Troubled Assets Relief Program (TARP) and the New Deal’s National Recovery Administration (NRA).

The President as Chief Administrator: James Landis and the Brownlow Report

Political Science QuarterlyVolume 123, Issue 1 p. 69-93 The President as Chief Administrator: James Landis and the Brownlow Report DONALD R. BRAND, DONALD R. BRAND DONALD R. BRAND is an associate professor of political science at College of the Holy Cross. He has published Corporatism and the Rule of Law: A Study of the National Recovery Administration and various articles on progressivism, the New Deal, and the administrative state in leading journals and edited volumes.Search for more papers by this author DONALD R. BRAND, DONALD R. BRAND DONALD R. BRAND is an associate professor of political science at College of the Holy Cross. He has published Corporatism and the Rule of Law: A Study of the National Recovery Administration and various articles on progressivism, the New Deal, and the administrative state in leading journals and edited volumes.Search for more papers by this author First published: 15 February 2013 https://doi.org/10.1002/j.1538-165X.2008.tb00617.xCitations: 6 AboutPDF ToolsExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume123, Issue1Spring 2008Pages 69-93 RelatedInformation

An Anatomy of a Cartel: The National Industrial Recovery Act of 1933 and the Compliance Crisis of 1934

This paper explores the nature and causes of the cartel compliance crisis that befell the National Industrial Recovery Act (NIRA) one year after its passage in 1933. We employ a simple game-theoretic model of the NIRA's cartel enforcement mechanism to show that the compliance crisis can largely be explained by changes in expectations, rather than a change in enforcement policy. Specifically, firms initially overestimated the probability that defection would be met with sanction by the cartel's enabling body, the National Recovery Administration - including a consumer boycott resulting from loss of the patriotic Blue Eagle emblem - and complied with the industry cartel rules. As these expectations were correctly adjusted downward, cartel compliance was lost. We support this hypothesis empirically with industry-level panel data showing how output and wage rates varied according to consumer confidence in the Blue Eagle. The analyis provides insight about cartel performance more generally.

CHRISTOPHER D. MCKENNA. The World's Newest Profession: Management Consulting in the Twentieth Century. (Cambridge Studies in the Management of Global Enterprise.) New York: Cambridge University Press. 2006. Pp. xxi, 370. $30.00

The title of Christopher D. McKenna's book suggests a send-up. But readers expecting this book to lampoon business gurus as prostitutes are in for a disappointment. McKenna does show that, just as cynics believe, consultants have often sold their chastity. He hopes, however, that management consultants will adopt professional standards and begin to protect their virtue. The virtue of consultants lies in their offering an inexpensive means of transferring knowledge. McKenna draws on economic theory to argue that corporations' transaction costs for buying knowledge from outside consultants are often less than the cost of acquiring it through their own managers' experiential learning. He demonstrates consultants' economic utility with a detailed account of how they supplied Lukens Steel with vital strategic knowledge at relatively low cost in the middle decades of the twentieth century. America's anti-trust laws make consulting a legally less problematic way of transferring knowledge than interfirm cooperation. McKenna superbly shows how the legal defeat of Franklin D. Roosevelt's National Recovery Administration and its implicit vision of an associative, corporatist state was a triumph for management consulting. Moreover, by mid-century the Truman administration tilted toward buying knowledge from external consultants rather than developing knowledge internally in the civil service, launching today's “contractor state.”