INTRODUCTION
The Great Depression, which hit the US in the late 1920s and was largely blamed on the Hoover Administration policies, ushered in the landslide victory of Franklin D. Roosevelt and the Democrats in 1932. The Hoover policy of raising tariffs of goods entering the US was created to please American farmers, but it boomeranged against the US when many governments imposed retaliatory tariff policies against its exports. This, in effect, started a domino effect that caused the Great Depression (Saint-Etienne 11-16). As businesses went bankrupt and many found themselves unemployed, the landslide victory of Roosevelt and the Democrats was, thus, a foregone conclusion in 1932. The term New Deal refers to the series of legislations, policies and measures, starting with the Emergency Banking Act that was passed three days after FDR took office, which the FDR administration passed and adopted to ease the impact of the Great Depression and revitalize the US economy (Berkin et al 605). In 1935, upon the recommendations of the committee formed by Roosevelt in 1934 to develop measures that would ensure security against life uncertainties, Congress passed the Social Security Act (SSA hereafter). Now codified as 42 USC Chapter 7, the SSA watered down American capitalism because of its characteristically welfarist policies and programs – which are antithetical to the concept of a capital state.
POLICIES AND PROGRAMS OF THE NEW DEAL’S SOCIAL SECURITY
The policies and programs of the SSA 1935, especially the original version, are inherently welfarist. This welfarist nature of the SSA is in conflict with capitalism embodied by the US economic system. The term ‘welfare’ is used to refer to human conditions that are characterized by “health, happiness, prosperity and well-being” (Weyts 75) and it could also refer to forms of assistance given to individuals to bring about such conditions. Welfarism refers to the adoption of policies, programs or measures that are used to perpetuate a welfare state or a system where the government has taken the responsibility of ensuring that the people are socially and economically secure. These welfarist policies, measures and programs often take the shape of old-age pension, unemployment benefits and similar measures. On the other hand, the concept of capitalism is primarily exemplified by unbridled accumulation of profits through the exploitation of resources and market opportunities in an atmosphere of free and liberal competition (Johnston 82). As can be gleaned from these definitions, there is an inherent tension between capitalism and welfarism with the latter inimical to the interest of the former. This is because while the goal of capitalism is to acquire and to acquire, welfarism operates by giving without profiting. While capitalism abides by free market forces allowing it to dictate economic thrust and direction, welfarism necessarily depends on government intervention for the implementation of relevant policies and measures. As can be gleaned from the discussion in the preceding paragraphs, the SSA is characterized by welfarist policies and programs.
The provisions constituting the SSA are welfarist in nature because their objective is to secure the economic well-being of persons, who under their circumstances, are expected to experience economic insecurity. As such, these policies and measures erode the integrity, to a certain extent, of the US as a capitalist state. Title II of the SSA 1935 is a typical example of a social welfare measure. In this section, the SSA provides for the old-age benefits to persons 65 years and older, subject to certain conditions and exceptions. This is a social welfare measure because it ensures the economic security of persons at the point in their life when they are presumed to be physically or mentally unfit or unable to secure financial support for themselves. More importantly, this measure is implemented using tax money assessed from all employees and their respective employers (Title VIII, SSA). Similarly, in the original version of the SSA, the federal grant to states of financial subsidies for the purpose of administering unemployment compensation within their respective jurisdictions is a prime example of a welfare measure. Thus, the economic plight of those who are unable to find employment and do not have other adequate source of income are alleviated through this particular social welfare measure. Title III authorizes the appropriation of the amounts needed to fund this measure from government revenues, while Title IX provides for the mechanism for funding the unemployment compensation, which is from the taxes assessed from and contributed by employers with more than eight employees. In addition, the SSA also made provisions for old age assistance, aid to the blind, aid to dependent children, maternal and child health, crippled children, child welfare and public health. All these provisions point to the welfarist nature of the SSA because it provides for the security of individuals from economic difficulties due to unforeseen disasters or conditions that renders a person unable to fend for himself or herself. This is done by a mechanism underpinned by risk-spreading among members of society so that everyone bears the burden of the risk rather than only one or specific individuals.
The nature of the SSA provisions as evidenced by the above discussion is antithetical and inimical to capitalist principles and more aligned with socialist ideals. The welfarist nature of the New Deal evidenced by legislations like the SSA, can be gleaned from the tone set by an advertisement placed by a government group that took charge of FDR’s response to the Great Depression in 1931 (Literary Digest 1931). The advertisement invoked the esprit des corps of American citizens in helping the thousands of people who were experiencing economic upheaval due to the Great Depression. The advertisement set the tone of the welfarist direction of the FDR government and the New Deal. Similar views were offered to revitalize the American society, such as that of Senator Long, who offered his own plan of share-a-wealth society (Long 1934). The capitalist system already established in the country made the SSA an objectionable policy to others .A letter sent to Mrs. Roosevelt by a woman for example, called the entire exercise as ‘stealing’ (Anonymous 1937). Historical Thinking Matters The woman obviously did not want have anything to do with the old, the infirmed and other marginalized members of society, but that they fend for themselves so that she and others like her can fully reap the fruits of their own labor.
CONCLUSION
The Social Security Act is the centerpiece of FDR’s New Deal and exemplified the welfarist nature of the political and economic strategy. This direction was evidenced by the policies, measures and provisions embraced by the SSA, which included unemployment compensation, old age benefits, assistance to the blind and similar provisions. All these programs are funded by government revenues collected from tax contributions of employers and employees, among others. The welfarist approach is antithetical to the capitalist system already well in place in the country in 1935, and as such, seemed to have diminished the purely acquisitive, competitive and selfish approach of the system. It was not surprising, therefore, that protests marked the passage of the law.
Works Cited
Anonymous. Document H: Stealing. Historical Thinking Matters. 1937.
Berkin, Carol, Miller, Christopher, Cherny, Robert and Gormly, James. Making America: A History of the United States, Volume II: Since 1865. Cengage Learning.
Johnston, Robert. The Radical Middle Class: Populist Democracy and the Question of Capitalism in Progressive Era Portland, Oregon. Princeton University Press. 2013.
Literary Digest. Of course WE CAN DO IT! Document A: 1931 Advertisement. Historical Thinking Matters. 1937.
Long, Huey. “Share the Wealth.” Congressional Records. 1934.
Saint-Etienne, Christian. The Great Depression, 1929 - 1938: Lessons for the 1980's. Hoover Press. 2013. Print.
Social Security Act 1935.
Weyts, Arabella. Meeting the Needs of Children in Substitute Care: A European Comparative Study of Welfare Services and Education. 2005. Academia Press. Print.
