Explanations

America on the Brink of Revolution?

The varying reactions in Europe and America bring up the question whether in principle an alternative to the capitalist economic system could have found a basis in the American society. The New Deal policies led upon an unprecedented path of far-reaching governmental steering of the economy. Still, they clearly represented an effort for system stabilization rather than for overcoming the existing order.

Protests lead to clashes between workers and policeOn the other hand, social tension posed a serious test to the system's capabilities of coping with social unrest. Persistent protests by farmers, workers, war veterans and hungry folk during the rock bottom years of the depression escalated to armed confrontations with the police and the army, and the distinctions between poor and rich challenged social peace. Moreover, the experiences of this decade formed a new America, a new system very different from the one existing before the Great Depression.

America's Challenge

The situation in the United States was closest to that in Britain. Both countries had long traditions of favoring the principles of competition, liberal and open democracy, and confinement of governmental influence. Yet, significant differences could be observed, as well. Anti-trust legislation had developed into opposite directions, and in America it had been used to split up huge conglomerates that had become potent players in the market. On the other hand, the labor movement was weak in the States and mostly organized as professional associations on a voluntary basis, which prevented democratic socialism from gaining significant influence in this country.

One of the key problems that had existed in America for half a century prior to the depression consisted in trying to arrange the power of the business elites with the principles of democracy and decentralization.

Underlying Values

Along with discrepancies in organizational settings, differences in value-systems offer an explanation for diverging paths of development in America and abroad. Two different sets of values are significant in terms of the economic system in the United States.

America has been marked both by cooperative values as well as by an acquisitive ethic. The two opposing currents go back to the founding years of the United States and have been taking turns in dominating political action throughout time. America has traditionally been a domain of laissez faire (McElvaine, 197). As the 'Virgin Land', it had been regarded as place of opportunity for a fresh beginning, without the constraints of the aristocratically determined European societies. During the time of colonization of the new continent, theories of natural right and natural law enjoyed great popularity. Adam Smith' publication, "Wealth of Nations" was published in 1776, coinciding with the declaration of independence of America. His concept of the 'invisible hand' directing the balancing act of markets found a favorable reception in a society in which natural explanations for other areas were ingrained into philosophy. As property ownership was fairly widespread in the agrarian society, the hope was to develop an economy in which there could be fair trade among people and little government interference.

Industrialization led to concentration of capital and, as a result, towards the questioning of the principle of acquisitive individualism by workers. While the emerging industrial elite could use the traditional concept to justify their dominance, labor reformers developed ideals opposing mere selfishness and individualism. Independence emerged as a value. This independence was meant to be distinguished from selfishness as it stressed self-reliance in combination with beliefs in justice, equity, cooperation, and human reciprocity. To sum up in broad terms, two opposing sets of values have existed over time in the States -- both being individualistic, one of them emphasizes cooperation, while the other stresses competition.

While workers sympathized with the former category, business people identified themselves with the latter. The middle class, throughout history, has oscillated between the two, mostly leaning toward cooperative values during times of recession and towards competitive values during times of prosperity (McElvaine, 201).

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