|The Future of Freedom Foundation|
While there certainly had been instances of government regulation and welfare prior to FDRs presidency, the long-established American tradition had been based on free enterprise (that is, free from government regulation), wealth accumulation (especially prior to the enactment of the Sixteenth Amendment in 1913), and private charity (as compared to government welfare).
Breaking with that long tradition, Franklin Roosevelt ushered in one of the most revolutionary economic transformations in history. Under his New Deal, the primary purposes of the federal government became to regulate business enterprise and tax and redistribute wealth in the form of government welfare.
Consider, for example, his 1933 National Industrial Recovery Act (NIRA), which directed the heads of all major industries in the country to jointly establish codes that would set minimum prices and wages for their respective industries. All businesses within each industry were then prohibited by law from competing with lower prices and wages.
There was the Agricultural Adjustment Act (AAA), which authorized the federal government to control the production of crops on farms all across the nation. Any farmer who refused to follow the new federal regulations was subject to federal criminal prosecution.
Later came the Social Security Act, an idea that had originated among German socialists during the regime of Otto von Bismarck, the Iron Chancellor of Germany. Social Security was a government welfare scheme by which money was taxed from the young and productive and distributed to the elderly.
While Roosevelt sold his New Deal as a way to save Americas free enterprise system, the truth was that his regulatory, taxing, and welfare schemes were directly contrary to the principles of free enterprise and private charity. Not surprisingly, many Americans, who had been raised to believe that government had no more business helping people with their economic problems than it did with their religious problems, were shocked over the new paternalistic way of life proposed by Roosevelt.
FDRs revolutionary New Deal plan encountered two big problems: The Constitution and the U.S. Supreme Court. When cases challenging the NIRA and the AAA reached the Supreme Court, it held both laws in violation of the Constitution. During Roosevelts first term, the Court ruled that other parts of his radical economic scheme were unconstitutional as well.
Elected by a landslide in 1936, Roosevelt did not intend to let those nine old men on the Supreme Court interfere with his transformation of American life. After all, he reasoned, the economic security of the nation was at stake and he wasnt about to let the Constitution or the Court interfere with his revolutionary plan.
The obvious course would have been to seek a constitutional amendment, which would have legally authorized the transformation from a private property, free-market system to a regulated, welfare-state system. Roosevelt would have none of that, not only because that was a time-consuming process, but because successfully convincing the American people to permanently change their economic system might well have proved difficult.
Instead, he came up with a shortcut plan designed to circumvent the constitutional-amendment process and the Supreme Court decisions against his New Deal. Sold as a way to help an overburdened nine-member Supreme Court, FDRs plan requested Congress to permit the president to appoint an additional Supreme Court justice for every justice over 70 years of age, thereby expanding the size of the Court. By enabling him to appoint new justices who were committed to his economic philosophy, Roosevelt figured that the newly aligned Court would start voting in his favor.
Despite his enormous popularity, the American people, to their everlasting credit, rose up in arms against Roosevelts court-packing scheme and, as a result, the Congress failed to enact it. Americans didnt like their president tampering with their constitutional order.
Roosevelt ended up getting what he wanted. After Justice Owen J. Roberts
controversial vote in favor of sustaining the constitutionality of a state
minimum-wage law in the 1937 case of West Coast Hotel v. Parrish, followed
by Roosevelts appointments to replace retiring justices, never again
did the Supreme Court declare his economic schemes unconstitutional.
Samuel Bostaph is head of the economics department at the University of Dallas and an academic advisor to The Future of Freedom Foundation
Anthony Gregory is a policy advisor at The Future of Freedom Foundation
James Bovard is author of The Bush Betrayal and serves as a policy advisor for The Future of Freedom Foundation
Benedict LaRosa is a historian and writer and serves as a policy advisor to The Future of Freedom Foundation
Bart Frazier is program director at The Future of Freedom Foundation.
Sheldon Richman is senior fellow at The Future of Freedom Foundation in Fairfax, Va., author of Tethered Citizens: Time to Repeal the Welfare State, and editor of The Freeman magazine.
Mr. Hornberger is founder and president of The Future of Freedom Foundation. Send him email.