Skocpol, Theda and Kenneth Finegold (1982) ‘State Capacity and Economic Intervention in the Early New Deal,’ Political Science Quarterly, 97 (2), 255-78
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(255)
The new deal was a major watershed in the development of an economically interventionist national state.
The NIRA and the Agricultural Adjustment Act were an extraordinary new departure for the US govt. due to the amount of economic intervention.
NIRA: pursuit of economic recovery through the united action of labour and management. Each code for each industry mandated minimum wages and maximum hours plus more union rights.
(256)
Agricultural Adj Act (AAA) aimed to raise prices for basic commodities.
These acts effectively mandated creation of the National Recovery Administration (NRA) and Agricultural Adjustment Administration (AAA).
(257)
If both these acts had succeeded the US might have by the mid 30s emerged from recession as a centralised system of politically managed corporatist capitalism.
But... NRA became increasingly unwieldy, conflict ridden, uncertain about basic goals and preferred means for achieving them. AAA's programme was more successful.
(258)
Why was the new deal's initial effort to intervene in agriculture institutionalised so much more quickly than it's attempt to intervene in industry. Neither conventional pluralism nor conventional Marxism can answer it.
(259)
Both of these theoretical approaches attempt to explain political outcomes in socially determinist ways.
Pluralist theory: the best organised groups in society with the greatest political resources will use government to achieve their goals.
Marxist theory: capitalist class benefits most from politics in a capitalist society (regardless of whether capitalists control decision making).
Industrial capitalists were already highly organised by 1932 through trade associations.
(260)
Their strategy for recovery of American industry was based on the relaxation of antitrust laws, and government sponsorship for industry by industry cooperation to coordinate prices and regulate production levels and employment conditions. The industrialists got what they asked for in terms of the NIRA and even more so in the implementation than the legislation.
Farmers were not as highly organised as the industrialists in the early 30s. Competing farmers' associations were pressing for different responses to the depression.
Farmers still did well out of the AAA despite lack of unity over requests for assistance.
Argument: in neither case can the demands, the organisation, or the class economic power of social groups directly explain the results of the New Deal govt interventions affecting the interests of farmers or industrialists.
Explanatory approach focusses on issue of state capacity. Govts can not always successfully enact their own decisions.
(261)
Given the state capacities at hand, the NIRA promised the impossible whereas the AAA promised the attainable.
Weakness of the American state and the failure of the NRA
Schumpeter's 1939 book Business Cycles outlined a previously entrenched skilled civil service or experienced bureaucracy in America.
Skowronek (1982) during the nineteenth century the US national polity was "stateless" - a government of courts and parties, one that functioned remarkably well in a decentralised capitalist economy.
(263)
Herbert Hoover created the ideal of the "associative state" a form of "adhocracy" involving using government officials as facilitators between influential group, particularly business trade associations.
(264)
Roosevelt was mainly reliant on one man, General Hugh Johnson to put together the entire NRA apparatus necessary to implement Title I of the NIRA.
An entire NRA staff had to be instantly assembled. Blue Eagle campaign was launched to persuade employers to agree immediately to blanket wage and hours provisions - and Johnson prompted industries to draw up their own codes of fair competition.
Business leaders successfully formulated these codes so as to allow a number of loopholes in the prolabour provisions as well as production cutbacks and noncompetitive higher prices for most industries.
(266)
The lack of input from labour groups and consumer groups meant that the NIRA was a bargain between business leaders and business leaders in the guise of the government.
(267)
The virtual complete absence of autonomous capacity to administer industrial planning in the US polity in the early 1930s condemned the NRA to be at first a characteristic mobilisation effort, and then an arena of bitterly politicised and inconclusive conflicts.
(268)
The Federal Agricultural Complex and the Roots of the Agricultural Adjustment Administration
(269)
The AAA's trajectory did not reflect the divisiveness and stalemate of the NRA's.
(270)
Important differences between agri production and industrial prodn. Annual cycle with fewer key decisions to be regulated over time.
The AAA was placed within an existing federal department. USDA. (NRA would not have gained from being placed within the Commerce dept - reason given earlier).
The Agri Dept was an island of strength in the ocean of weakness of Federal government.
(274)
The "personality factor" had been dissolved in the USDA because a corporate factor the influence of land grant college training and tradition has been overwhelmingly strong.
Conclusion
The agricultural experts, ideas and administrative means were products of a long process of institution building whose roots go back to the Civil War.
The institutions laid the basis for the administrative will to intervene in the national market economy.
Armstrong: a large measure of organisational unity and homogeneity in socialisation among elite administrators has been crucial for development of an interventionist role definition.
The US agricultural complex historically nurtured a process of political learning about what could effectively be done for farmers and society as a whole through public agricultural policy.
Heclo: politics finds its source not only in power but also in uncertainty
(278)
The reach of the New Deal's ambitious early venture into industrial planning simply exceeded the grasp that could be afforded by the public institutions and intelligence of the day.
