An ambivalent legacy: black Americans and the political economy of the New Deal.

• Author: Moreno, Paul

No group in America votes Democratic more than black Americans, who from Reconstruction until the Great Depression had clung just as tenaciously to the Republican Party. Historians usually regard the New Deal as the turning point in this political realignment, but they remain uncertain as to why blacks flocked to the Democratic Party in the 1930s. The racial impact of New Deal policies also evokes controversy.

Hagiography characterized the first generation to interpret the New Deal, as a left-liberal consensus dominated the scholarly community. The hagiographers had little to say about the racial impact of New Deal policies. (1) James MacGregor Burns argued that Roosevelt was slow to see the potential of a voting bloc of minority groups and that blacks liked FDR's personality more than they approved of his policies (1956, 198, 339). Carl Degler depicted the New Deal as a "third American revolution" that included blacks. Though it produced no specific legislative benefits for blacks as such, "The Roosevelt administration did much for the Negro.... When low-cost housing went up, Negroes got their share; Negro youths were welcome in the CCC and NYA just as whites were, though in the former the races were segregated.... Even-handedly distributed federal relief funds were a gift from heaven to the black man, who was traditionally `hired last and fired first'" (1959, 397). Many blacks cast their first votes in Agricultural Adjustment Administration (AAA) and National Labor Relations Board (NLRB) elections (Degler 1959, 397). Although conceding that the New Deal "enhanced the power of interest groups who claimed to speak for the millions, but sometimes represented only a small minority," William Leuchtenberg concluded, "Negro intellectuals might fret at the inequities of the New Deal, but the masses of Negroes began to break party lines in gratitude for government bounties and nondiscriminatory treatment" (1963, 347, 186).

In short, most hagiographers pointed to black inclusion in an off-handed way; they conceded some shortcomings, but without much sustained analysis. The New Left critique of the New Deal that began in the 1960s took for granted black exclusion without shedding any new light on the matter. Paul Conkin quickly noted, "Negroes, politically purchased by relief or by the occasional concern of bureaucrats or Mrs. Roosevelt, remained a submerged and neglected caste" (1967, 73). Barton Bernstein similarly noted that the New Deal "failed to extend equality and generally countenanced racial discrimination and segregation"(1968, 263). Pondering the great shift of blacks to the Democratic Party, Jerold Auerbach identified a fundamental weakness in the New Left critique. "Unless one assumes, as Bernstein, Conkin, and others elsewhere assume, that the New Deal was so diabolically clever that it won the support of those whom it did not help, one must conclude that most black (and white) Americans found much in the New Deal to command their allegiance" (1969, 22).

In the next decade, several new works dealt specifically with New Deal racial policy and the impact of New Deal policies on blacks. The first were markedly evenhanded and mildly critical (Kirby 1980; Weiss 1983; Wolters 1970). (2) At the same time, a new wave of ideologically leftist scholars found much of appeal in the New Deal. Unlike the 1960s New Left critics who condemned the shortcomings of New Deal liberalism, these writers pointed out continuity between New Deal liberalism and New Left radicalism (Sitkoff 1978; Sullivan 1996).

At present, discussion of the issue is locked into a left-liberal/left-radical dialogue that is typical of twentieth-century U.S. history (Hamby 1990, 10). In this article, I attempt to bring in the perspective of recent scholarship informed by a classical liberal (or conservative) perspective. Instead of lamenting that the New Deal did not produce full-blown socialism, I consider the possibility that it went too far. The New Deal may not have been "diabolically clever," but its combination of economic failure and political success can be explained in terms of the public-choice theory of political economy that few historians have employed.

One labor historian, trying to bridge the left-liberal/left-radical gap, notes that radical historians who "emphasize only the organized labor movement's institutional racism run the risk of obscuring key aspects of black workers' activism, as well as their distinct ideological perspectives." On the other hand, this historian points out, left-liberal historians tend to "romanticize their subjects' thinking and behavior, and implicitly deny the consequences of white unionists' strategies" (Arnesen 1993, 56). This observation is true, but, in addition, both radicals and liberals on the left ignore some fundamental points about the larger political, legal, and constitutional order as well as the economics of discrimination--the complex known as "political economy." (3)

In this article, I examine the racial impact of New Deal agricultural, industrial (especially labor), and other policies. I conclude that the criticism of New Deal policies is largely valid. The harm that New Deal policies did to blacks increased the perceived need for remedies such as affirmative action in 1960s, and in several respects such policies were adumbrated in the New Deal itself. Finally, I consider why an economic recovery program that was such a failure had such political success, in particular in the black partisan realignment of the 1930s.

New Deal Agricultural Policy

Because most blacks lived in the rural South, New Deal agricultural policy had the greatest and most immediate impact on them. Half of black Americans were farmers in 1932, but only 20 percent of them owned their own land. Because New Deal agricultural policy was shaped to benefit landowners, most blacks were at the bottom of a system that funneled benefits to tenants and sharecroppers through those landowners (Wolters 1970, part 1).

The 1933 Agricultural Adjustment Act (AAA) attempted to raise the prices farmers received for their crops by reducing the amounts they produced. Farmers and the federal government would agree to reduce acreage in selected crops, and farmers would get federal benefit payments, secured by an excise tax on commodity processors (Hosen 1992, 61). Sharecroppers were supposed to receive one-half of such payment, share tenants two-thirds, and cash tenants all of it. This program, involving one million contracts between owners and the government, was impossible to police, and it provided an invitation--often accepted--to fraud.

In 1934, Congress replaced plow-up payments with "rental" and "parity" payments, and gave sharecroppers one-ninth of the latter. After the Supreme Court struck down the first AAA in 1936, that law's successor, the Soil Conservation and Domestic Allotment Act of 1936, raised the sharecropper's share to one-fourth. (4) Although sharecropper income did rise under the revised law, "The nature of the landlord-tenant relationship presented the landlord with great opportunities for fraud, and under the circumstances it is not surprising that many landlords took unfair advantage" (Wolters 1970, 24).

Landowners would maximize their benefit from acreage-reduction payments if they did not have any tenants or sharecroppers at all, so the New Deal's agricultural policy actually displaced large numbers of farmers. Clearly, "Saving the farmer meant saving some farmers at the expense of others" (Weiss 1983, 54), and it was often white farmers who were saved at the expense of blacks. The number of black tenants fell by one-third, black sharecroppers by one-fourth, and white sharecroppers by 37 percent, whereas the number of white tenants rose. Yet Secretary of Agriculture Henry Wallace, intensely fearful of alienating southern white support for the Roosevelt administration, worried that the New Deal might be doing too much to help blacks (Sitkoff 1978, 44; Weiss 1983, 54).

Scholars generally agree that New Deal farm policy had a disastrous effect on blacks, despite the bureaucrats' claims of sensitivity to black hardships. By responding to the politically powerful interests of large landowners, the New Deal political coalition contributed to the "downward mobility" of less well-connected southern blacks (Couch and Shugart 1998, 214; Valocchi 1994, 352). As one economic historian has put it, "The South was planter's heaven by the late 1930s" (Wright 1986, 233). New Deal agricultural policies amounted to an "American enclosure movement," pushing blacks off the land in a period when the pull of northern industrial employment was slack. "If orthodox market economists want to find examples of well-intentioned liberal interventions leading to hardships for the poor and vulnerable, they can readily find them in these chapters of southern history" (Mandle 1992, 81).

The farm programs of the 1920s had anticipated the racially disparate impact of New Deal agricultural measures. Robert C. Weaver noted "the abuses of the Federal feed, seed, and fertilizer laws in 1928-29. These abuses were of the same nature as those which confront the AAA in its dealings with Negro tenants" ([1935] 1968, 327). Like so much of the New Deal, its agricultural policies were really just an expansion or acceleration of the "progressive" policies of the 1920s.

Some historians have argued that the effect of such a push may have been "progressive" in the long run, and some have claimed that its ill effects have been exaggerated. Although detractors often cite the figure of one million displaced blacks, the number of black farmers declined less in the 1930s than it had in the previous two decades. Still, "Regardless of the facts, the claim of Negroes that the AAA drove hundreds of thousands of blacks from the land persisted in the 1930s. It gained currency because so much of the first New Deal was in fact discriminatory against blacks"...