Essay/Term paper: Roosevelt

Essay, term paper, research paper:  History

The crash of the stock market brought many hard times.

Franklin D. Roosevelt's New Deal was a way to fix these

times. John Stuart Mill and John Maynard Keynes were two

economists whose economic theories greatly influenced and

helped Franklin D. Roosevelt devise a plan to rescue the

United States from the Great Depression it had fallen into.

John Stuart Mill was a strong believer of expanded

government, which the New Deal provided. John Maynard

Keynes believed in supply and demand, which the New

Deal used to stabilize the economy. Franklin D. Roosevelt's

New Deal is the plan that brought the U.S. out of the Great

Depression. It was sometimes thought to be an improvised

plan, but was actually very thought out. Roosevelt was not

afraid to involve the central government in addressing the

economic problem. The basic plan was to stimulate the

economy by creating jobs. First Roosevelt tried to help the

economy with the National Recovery Administration. The

NRA spread work and reduced unfair competitive practices

by cooperation in industry. Eventually the NRA was

declared unconstitutional. Franklin D. Roosevelt then needed

a new plan. Keeping the same idea of creating jobs he made

many other organizations devoted to forming jobs and in turn

helping the economy. One of those organizations was the

Civilian Conservation Corps. This corps took men off the

streets and paid them to plant forests and drain swamps.

Another of these organizations was the Public Works

Administration. This organization employed men to build

highways and public buildings. These were only some of the

organizations dedicated to creating jobs. Creating jobs was

important because it put money in the hands of the

consumer. This directly affected the supply and demand. The

more money they had the more they could spend. This

would slowly start a chain reaction and bring the economy

back to the way it was before the depression. By the end of

the 1930's this plan had lowered unemployment to 17.2%.

To make these organizations it was going to take money.

Roosevelt had to deficit spend, which is when the

government spends more than their budget in one year, in

order to obtain this money. Of course these ideas of supply

and demand and active government didn't just come to him.

He was influenced by John Maynard Keynes and John

Stuart Mill. There philosophies were the basis of the New

Deal. John Stuart Mill, who began studying economics at

age 13, was one of the most influential political thinkers of

the mid-Victorian period. He believed in empiricism and

utilitarianism. Empiricism is the belief that legitimate

knowledge comes only from experience. Utilitarianism is the

belief by which things are judged right or wrong. It is judged

according to their consequences. In a way he was a

hypocrite. When the economy was good he believed in

Laisezz-Faire, which means "hands off." If the economy was

bad, though, he believed in an extended role of government.

This simply meant that the government should take part in

the economy and try to make it better. The New Deal was a

very active government plan because it had the government

working directly to make jobs and fix the economy. Mill

died in 1873 and would never had a chance to talk to

Franklin D. Roosevelt. In a press conference Franklin D.

Roosevelt once said, "I brought down several books by

English economists and leading American economists, I

suppose I must have read different articles by fifteen different

experts."(Schlesinger, Pg.650) This writing indirectly steered

Roosevelt towards a plan which expanded the role of

government. Mill gave Franklin D. Roosevelt the basis of the

plan, but it needed to be elaborated on. John Maynard

Keynes was the man to do this. John Maynard Keynes, one

of the most influential economists of the 20th century. For

many years he was an active voice in economics. In 1929 he

wrote We Can Conquer Unemployment and in 1930 he

wrote his Treatise on Money. Ten years before he died he

wrote his General Theory of Employment, Interest and

Money. Above all he believed in supply and demand. This

was an indirect way to let the economy balance itself. In

order for this system to work people needed money. This

could only be done by creating jobs. Keynes also believed

that to reduce unemployment the government needed to

increase the aggregate demand. The aggregate demand is the

total amount of goods being demanded. The government

could do this by creating jobs. These jobs would provide

people with money to spend on products. The ability to pay

and the increase desire to spend would increase the demand

for goods. The demand for goods would rise and the

demand for workers would rise. This would slowly reduce

the unemployment rate and put the economy back where it

was before the crash of the stock market. In Arthur M.

Schlesinger Jr.'s book The Politics of Upheaval it's stated

that Franklin D. Roosevelt and Keynes communicated on

several occasions such as, letters, English tea meetings, and

messages delivered via mutual friends. Although Franklin D.

Roosevelt never publicly embraced Keynes' theories, and at

times voiced disagreement with parts of his theories, there

were many similarities between the works of the two men.

Franklin D. Roosevelt took these philosophies and created

the New Deal, which eventually brought the United States

out of the Great Depression. John Stuart Mill gave Franklin

D. Roosevelt the idea of an active government and John

Maynard Keynes showed him how to do it. Although

Franklin D. Roosevelt never really liked economists it

appears that the work of many economists showed up in his

New Deal. Although Mill did not directly influence FDR his

philosophies were present in Franklin D. Roosevelt's plan.

Also, Keynes theories were disagreed on time and time

again by FDR, but in the end the New Deal was almost a

perfect example of Keynes' theories.