Government, labor, and business arbitration
Despite the dismal record in aiding marginal farmers and African Americans, among others—contrasted with its often frequent generosity toward certain business interests—the effect of the New Deal was to elevate and strengthen new interest groups so as to allow them to compete more effectively for the interests by having the federal government evolve—albeit in an ad hoc, perhaps unintentional manner—into an arbitrator in competition among all elements and classes of society, acting as a force that could mediate when necessary to help some groups and limit the power of others. By the end of the 1930s, U.S. business found itself competing for influence with an increasingly powerful labor movement, one that was engaged in mass mobilization and sometimes militant action; with an organized agricultural economy, due to decades of agrarian organization and agitation dating back to the farmers associations and populist revolt of the late nineteenth century; and with aroused consumers. The New Deal accomplished this by creating a series of state institutions that greatly, and permanently, expanded the role of the federal government in U.S. life. The government was now committed to providing at least minimal assistance to the poor and unemployed; to protecting the rights of labor unions; to stabilizing the banking system; to building low-income housing; to regulating financial markets; to subsidizing agricultural production; and to doing many other things that had not previously been federal responsibilities.
Thus, perhaps the strongest legacy of the New Deal, in other words, was to make the federal government a protector of interest groups and a supervisor of competition among them. As a result of the New Deal, U.S. political and economic life became much more competitive than before, with workers, farmers, consumers, and others now able to press their demands upon the government in ways that in the past had been available only to the corporate world. Hence the frequent description of the government the New Deal created as the "broker state," a state brokering the competing claims of numerous groups.
The liberal assumptions that the New Deal acted as the foe of private business interests have been challenged. After all, in many cases New Deal efforts were intended to enhance the position of private entrepreneurs—especially their concerns over inflation—even, at times, at the cost of some of the liberal reform goals that some administration officials espoused. The New Deal also did little to enhance the positions of some previously disadvantaged groups, but did little or nothing for many others, especially blacks, sharecroppers, and the urban poor.
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