Economic History

The New Deal generally refers to a set of domestic policies implemented by the administration of Franklin Delano Roosevelt in response to the crisis of the Great Depression. Propelled by that economic cataclysm, Roosevelt and his New Dealers pushed through legislation that regulated the banking and securities industries, provided relief for the unemployed, aided farmers, electrified rural areas, promoted conservation, built national infrastructure, regulated wages and hours, and bolstered the power of unions. The Tennessee Valley Authority prevented floods and brought electricity and economic progress to seven states in one of the most impoverished parts of the nation. The Works Progress Administration offered jobs to millions of unemployed Americans and launched an unprecedented federal venture into the arena of culture. By providing social insurance to the elderly and unemployed, the Social Security Act laid the foundation for the U.S. welfare state.

The benefits of the New Deal were not equitably distributed. Many New Deal programs—farm subsidies, work relief projects, social insurance, and labor protection programs—discriminated against racial minorities and women, while profiting white men disproportionately. Nevertheless, women achieved symbolic breakthroughs, and African Americans benefited more from Roosevelt’s policies than they had from any past administration since Abraham Lincoln’s. The New Deal did not end the Depression—only World War II did that—but it did spur economic recovery. It also helped to make American capitalism less volatile by extending federal regulation into new areas of the economy.

Although the New Deal most often refers to policies and programs put in place between 1933 and 1938, some scholars have used the term more expansively to encompass later domestic legislation or U.S. actions abroad that seemed animated by the same values and impulses—above all, a desire to make individuals more secure and a belief in institutional solutions to long-standing problems. In order to pass his legislative agenda, Roosevelt drew many Catholic and Jewish immigrants, industrial workers, and African Americans into the Democratic Party. Together with white Southerners, these groups formed what became known as the “New Deal coalition.” This unlikely political alliance endured long after Roosevelt’s death, supporting the Democratic Party and a “liberal” agenda for nearly half a century. When the coalition finally cracked in 1980, historians looked back on this extended epoch as reflecting a “New Deal order.”

Professional sports teams are athletic organizations comprising talented, expert players hired by club owners whose revenues originally derived from admission fees charged to spectators seeing games in enclosed ballparks or indoor arenas. Teams are usually members of a league that schedules a championship season, although independent teams also can arrange their own contests. The first professional baseball teams emerged in the east and Midwest in 1860s, most notably the all-salaried undefeated Cincinnati Red Stockings of 1869. The first league was the haphazardly organized National Association of Professional Base Ball Players (1871), supplanted five years later by the more profit-oriented National League (NL) that set up strict rules for franchise locations, financing, and management–employee relations (including a reserve clause in 1879, which bound players to their original employer), and barred African Americans after 1884. Once the NL prospered, rival major leagues also sprang up, notably the American Association in 1882 and the American League in 1901.

Major League Baseball (MLB) became a model for the professionalization of football, basketball, and hockey, which all had short-lived professional leagues around the turn of the century. The National Football League and the National Hockey League of the 1920s were underfinanced regional operations, and their teams often went out of business, while the National Basketball Association was not even organized until 1949.

Professional team sports gained considerable popularity after World War II. The leagues dealt with such problems as franchise relocations and nationwide expansion, conflicts with interlopers, limiting player salaries, and racial integration. The NFL became the most successful operation by securing rich national television contracts, supplanting baseball as the national pastime in the 1970s. All these leagues became lucrative investments. With the rise of “free agency,” professional team athletes became extremely well paid, currently averaging more than $2 million a year.

Public housing emerged during the New Deal as a progressive effort to end the scourge of dilapidated housing in American cities. Reformers argued that the private market had failed to provide decent, safe, and affordable housing, and they convinced Congress to provide deep subsidies to local housing authorities to build and manage modern, low-cost housing projects for the working poor. Well-intentioned but ultimately misguided policy decisions encouraged large-scale developments, concentrated poverty and youth, and starved public housing of needed resources. Further, the antipathy of private interests to public competition and the visceral resistance of white Americans to racial integration saddled public housing with many enemies and few friends. While residents often formed tight communities and fought for improvements, stigmatization and neglect undermined the success of many projects; a sizable fraction became disgraceful and tangible symbols of systemic racism toward the nation’s African American poor. Federal policy had few answers and retreated in the 1960s, eventually making a neoliberal turn to embrace public-private partnerships for delivering affordable housing. Housing vouchers and tax credits effectively displaced the federal public housing program. In the 1990s, the Clinton administration encouraged the demolition and rebuilding of troubled projects using vernacular “New Urbanist” designs to house “mixed-income” populations. Policy problems, political weakness, and an ideology of homeownership in the United States meant that a robust, public-centered program of housing for use rather than profit could not be sustained.

Between 1880 and 1929, industrialization and urbanization expanded in the United States faster than ever before. Industrialization, meaning manufacturing in factory settings using machines plus a labor force with unique, divided tasks to increase production, stimulated urbanization, meaning the growth of cities in both population and physical size. During this period, urbanization spread out into the countryside and up into the sky, thanks to new methods of building taller buildings. Having people concentrated into small areas accelerated economic activity, thereby producing more industrial growth. Industrialization and urbanization thus reinforced one another, augmenting the speed with which such growth would have otherwise occurred.

Industrialization and urbanization affected Americans everywhere, but especially in the Northeast and Midwest. Technological developments in construction, transportation, and illumination, all connected to industrialization, changed cities forever, most immediately those north of Washington, DC and east of Kansas City. Cities themselves fostered new kinds of industrial activity on large and small scales. Cities were also the places where businessmen raised the capital needed to industrialize the rest of the United States. Later changes in production and transportation made urbanization less acute by making it possible for people to buy cars and live further away from downtown areas in new suburban areas after World War II ended.