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The New Deal, racism and war

The New Deal, racism and war

By Prof Justin Podur

The original New Deal has credited with saving the US economy from the Great Depression and, perhaps, saving the country from socialism.

The original New Deal, and its champion, Franklin D. Roosevelt, are credited with saving the US economy from the Great Depression - and perhaps preventing the country from adopting 'socialism'.

The New Deal is the inspiration behind the contemporary call for a Green New Deal. But its history is remains contested. The story is told in Stan Cox’s recent book The Green New Deal and Beyond.

In 1932, US unemployment was at 24 percent. The New Deal started by designating $3.3 billion for public works, an amount larger than the entire federal budget just three years before.


Roosevelt created new agencies to try to steer private industry into a gentle, voluntary form of economic planning.

In 1935, the Supreme Court struck down one of these initiatives - the National Recovery Act. But that same year, the New Dealers started a Works Progress Administration (WPA) that hired eight million unemployed Americans to build public infrastructure.

The New Deal also took place in a time of unremitting white terror towards black people in the US south. The New Deal programmes helped cement racial inequalities. Federal relief agencies paid locally prevailing wages, allowing lower wages in the US south.

Black sharecroppers’ government benefits were kept by their white landlords. White plantation owners would receive federal compensation for cotton extracted from land, and then turn around and evict the black tenants that worked the land anyway.

Social Security did not cover farm workers or domestic workers - the occupations that employed two thirds of black workers.


The Federal Housing Administration (FHA) required banks to perpetuate segregation: “If a neighbourhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes,” the FHA underwriting manual instructed.

Despite this, the New Deal faced elite opposition, and so Roosevelt reduced stimulus funds by 25 percent between 1936-8. Unemployment went back up to 19 percent.

In the end, the New Deal was not the answer to the Depression. That answer came in the form of a war: first supplying Europe, then sending the US military to world war two (WWII).

According to Patrick Renshaw the US spent $321 billion on WWII, more than its total spending from 1790-1940. Unemployment fell to 1.2 percent.


The New Deal took place in the age of imperialism. India, Africa and much of southeast Asia were colonies. The Philippines and Cuba were US possessions. Other lands that the US had taken - Puerto Rico and Hawaii - still are.

In the Arab world, the British sponsored the House of Saud, dismantled and subordinated the economies of the Levant and Egypt.

By the time of the New Deal, the US empire was pushing the British empire out of the fossil fuel-rich Middle East.

In 1945, Roosevelt met the Saudi king at Great Bitter Lake in the Suez canal, moving Saudi Arabia into the US’ system.

What economists Jonathan Nitzan and Shimshon Bichler call the “weapondollar-petrodollar” global economy was established.


The Saudi dictatorship would ensure that the price of oil would favour the US, which would get back what it paid for the oil in weapons sales.

The hundreds of billions of dollars of sales of military hardware would be conducted in US dollars, the reserve currency of all the world, which enabled the US to print money and accumulate wealth at the expense of every other country.

While ending fascism was necessary, it paved the way for a US economy built on conflict. It is an empire based on endless war and fossil fuels. Climate change is just one of its life-destroying consequences.

Underpinning this system is a regime of permanent US warfare that has killed millions in the decades since the New Deal, including the dropping of nuclear bombs on Japan, the high-tech destruction and aerial bombardment of Korea, Vietnam, Grenada, Panama, Iraq, Yugoslavia, Afghanistan, Palestine, Lebanon, Libya, Syria, Yemen and other countries, covert operations in every country in the world, and the imminent threat of nuclear catastrophe.

In making the US the wealthiest society in human history, the stimulus of the New Deal played a much smaller role than the stimulus of WWII.


The long-term wealth of the US was guaranteed not by either stimulus, but by the consolidation of a global empire with the US at its centre.

Given this context, can the New Deal be divested of its racist and imperialist baggage and reinvented to save the world from climate catastrophe?

At the end of The Green New Deal and Beyond, Cox suggests a series of ways that a Green New Deal could include justice for the financially and energy-impoverished peoples of the world.

This starts not with greening the US military, as Elizabeth Warren suggested on the US campaign trail, but with disarming and dismantling it, as well as the militarized police in the US, both of which are disastrous fossil fuel consumers while also being implicated in persistent human rights abuses.

Protecting and expanding Indigenous land bases will not only redress some of the horrors of colonialism, but also reduce carbon emissions from land use.


In some places - like Haiti or the Democratic Republic of Congo - the use of energy will actually have to increase for there to be any economic justice.

If we are going to have to discard baggage one way or another, internationalists might find more interesting experiences and tools from a study of the Five Year Plans of communist China and the Soviet Union and of India when it was socialist.

These countries’ economies and polities have had many flaws, and their planning processes have had many errors, all of which have been amplified by Western propaganda as efficiently as the West’s colonial genocides and massacres have been minimised.

But it may be productive to study how vast, poor countries devastated by imperialism tried to plan for development within severe constraints - including the hostile US empire.

With files from See full article here.