The New Deal: A Moral Algorithm Evaluation and Solutions for Its Shortcomings

The New Deal A Moral Algorithm Evaluation and Solutions

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Introduction: Methodology and the Moral Algorithm Framework

The New Deal, enacted by President Franklin D. Roosevelt from 1933 to 1938, was a transformative set of programs aimed at addressing the Great Depression’s economic and social crises through relief, recovery, and reform. To evaluate its successes and propose solutions to its weaknesses, this article applies the Moral Algorithm, a framework outlined at themoralalgorithm.com, rooted in John Adams’ principle that government exists for the “common good; for the protection, safety, prosperity, and happiness of the people.” The Moral Algorithm draws on timeless ethical principles from Adams, John Rawls’ Veil of Ignorance (equity without knowing one’s position), and Aristotle’s civic virtue, using a data-driven approach to assess policies across four dimensions:

1. Protection: Safeguarding citizens’ rights, freedoms, and access to essential services.
2. Safety: Ensuring physical and economic security.
3. Prosperity: Promoting economic opportunity and equitable wealth distribution.
4. Happiness: Enhancing public welfare, morale, and social cohesion.

Each dimension is scored on a 0–10 scale, with 10 indicating strong alignment with the common good and 0 indicating failure or harm. The initial evaluation assesses the New Deal’s accomplishments using historical data (e.g., GDP growth, unemployment rates, program participation) from scholarly sources. Weaknesses are then identified, and solutions are proposed to address them, designed to be feasible within the 1930s’ political, economic, and social constraints. Solutions leverage existing New Deal frameworks, FDR’s political capital, and measurable outcomes to enhance alignment with the Moral Algorithm. The final score averages the four dimensions, providing a holistic assessment of the New Deal’s impact and potential improvements.

This article combines the evaluation of successes and solutions into a single narrative, ensuring clarity and completeness. All data, metrics, and reasoning are included to enable readers to understand the analysis without external references.

Successes of the New Deal

1. Protection: Safeguarding Rights and Access

The New Deal significantly expanded protections for Americans, aligning with the Moral Algorithm’s emphasis on securing citizens’ rights and well-being.

• Social Security Act (1935): This landmark legislation established pensions for the elderly, unemployment insurance, and aid for dependent children and the disabled. By 1940, it covered 20 million workers, with 160,000 receiving pensions by 1937, providing a safety net for vulnerable populations.
• National Labor Relations Act (Wagner Act, 1935): This guaranteed workers’ rights to unionize and bargain collectively, boosting union membership from 3 million in 1933 to 8 million by 1937. It empowered workers to negotiate better wages and conditions, enhancing labor protections.
• Fair Labor Standards Act (1938): This set a federal minimum wage (25 cents/hour) and a 44-hour workweek, benefiting 12 million workers by 1940 and establishing standards for fair compensation.

Analysis: These measures institutionalized protections that aligned with the common good, ensuring access to economic security and labor rights. However, exclusions of agricultural and domestic workers, who comprised 65% of African American workers and many women, due to compromises with Southern Democrats, limited equity. Racial segregation in programs like the Civilian Conservation Corps (CCC) and male-focused Works Progress Administration (WPA) jobs further marginalized these groups.

Score: 7/10

• Strengths: Established enduring protections through Social Security and labor rights.
• Weaknesses: Excluded key demographics, perpetuating racial and gender inequities.

2. Safety: Economic and Physical Security

The New Deal restored economic stability and reduced immediate threats of the Great Depression, prioritizing safety.

• Emergency Banking Act (1933): This stabilized the banking system by closing insolvent banks and reopening 5,000 sound ones within days. Bank failures dropped from 4,000 in 1932 to 61 in 1934, restoring public confidence.
• Federal Deposit Insurance Corporation (FDIC, 1933): By insuring deposits up to $2,500 (later $5,000), the FDIC protected savings, with 90% of banks insured by 1934, reducing withdrawals.
• Federal Emergency Relief Act (1933): This provided $500 million for direct relief, aiding 4 million families by 1934.
• Works Progress Administration (WPA, 1935): Employing 8.5 million people from 1935–1943, the WPA built 650,000 miles of roads, 78,000 bridges, and 125,000 public buildings, reducing unemployment from 25% (1933) to 14.6% (1937).

Analysis: These programs significantly enhanced economic security, preventing systemic collapse and providing jobs. However, unemployment remained in double digits (10.8% in 1940), and the 1937–1938 recession saw a spike to 19%. Rural areas, particularly in the Dust Bowl, received limited relief, indicating incomplete coverage.

Score: 8/10

• Strengths: Reduced bank failures, created jobs, and stabilized the economy.
• Weaknesses: Persistent unemployment and regional disparities.

3. Prosperity: Economic Opportunity and Equity

The New Deal spurred economic growth and reduced inequality, fostering prosperity.

• Economic Growth: GDP grew from $56.4 billion in 1933 to $91.9 billion in 1937, a 63% increase. Industrial production rose 50% by 1937.
• Public Works Administration (PWA): Investing $3.3 billion in infrastructure, the PWA created jobs and stimulated industry through projects like the Golden Gate Bridge.
• Agricultural Adjustment Act (AAA, 1933): By subsidizing farmers to reduce crop supply, the AAA doubled crop prices by 1937, raising farm income from $1.9 billion (1932) to $5.3 billion (1936).
• Inequality Reduction: The Gini coefficient, measuring income inequality, dropped from 0.45 in 1929 to 0.38 by 1945, reflecting more equitable wealth distribution.

Analysis: These outcomes demonstrate significant progress in economic opportunity. However, the AAA benefited large farmers over small tenant farmers, displacing 200,000 (many African American) by 1937. The 1937 recession reversed gains, and full recovery required World War II spending.

Score: 7/10

• Strengths: Drove GDP growth and reduced inequality.
• Weaknesses: Uneven benefits and incomplete recovery.

4. Happiness: Public Welfare and Social Cohesion

The New Deal uplifted public morale and fostered hope, enhancing happiness.

• Public Sentiment: FDR’s fireside chats and optimistic leadership boosted confidence, with 70% urban voter support in 1936 polls.
• WPA Cultural Programs: Employing 40,000 artists, these programs produced 1,200 plays and 1,000 murals, enriching communities.
• Tennessee Valley Authority (TVA): Electrifying 2 million rural households by 1940, the TVA improved living standards in the South’s poorest region.
• Electoral Support: FDR’s 1936 landslide (60.8% popular vote, 523 electoral votes) and 1934 midterm gains reflected public endorsement.

Analysis: These initiatives restored hope and cultural engagement. However, racial and gender exclusions strained cohesion, and labor strikes (e.g., 1936 Flint GM strike) reflected unrest. Conservative opposition, labeling the New Deal socialistic, created division.

Score: 8/10

• Strengths: Uplifted morale and improved living standards.
• Weaknesses: Exclusions and polarization limited universal impact.

Overall Score: (7 + 8 + 7 + 8) / 4 = 7.5/10
The New Deal aligned strongly with the Moral Algorithm but was tempered by exclusions, incomplete recovery, uneven prosperity, and social tensions.

Solutions to New Deal Weaknesses

To address the New Deal’s shortcomings, the following solutions are proposed, designed to be feasible within the 1930s’ context, leveraging FDR’s political capital and existing frameworks. Each solution targets a specific weakness, with expected impacts and alignment with the Moral Algorithm.

1. Addressing Exclusion of Marginalized Groups

Weakness: The exclusion of agricultural and domestic workers (65% of African American workers, many women) from Social Security and labor protections, combined with segregated CCC camps and male-focused WPA jobs, perpetuated inequities, violating Rawls’ Veil of Ignorance.

Solution: Expand coverage of Social Security and labor protections to include agricultural and domestic workers, with federal oversight to ensure equity.

• Implementation:
  • Amend the Social Security Act (1936) to include agricultural and domestic workers, using FDR’s 1936 mandate to overcome Southern Democratic resistance.
  • Establish a Federal Equity Board within the Department of Labor to audit program participation, mandating 10% WPA jobs for African Americans (reflecting population share) and 20% for women (reflecting workforce participation).
  • Fund desegregated job training through the WPA, targeting 500,000 African American and female workers by 1938, using CCC infrastructure.
• Feasibility: Politically challenging but possible post-1936. Reallocate $100 million from PWA budgets to fund training and oversight.
• Expected Impact: Include 2 million additional workers in Social Security, reducing African American poverty (70% in 1935) and increasing Black program participation from 3% to 10%. Women’s participation in WPA jobs could rise from 12% to 20%.
• Moral Algorithm Alignment: Enhances protection by ensuring equitable rights, fulfilling Rawls’ principle of fairness.

2. Addressing Incomplete Economic Recovery

Weakness: Persistent unemployment (14.6% in 1937, 19% in 1938 recession) and reliance on World War II spending exposed economic fragility, undermining safety and prosperity.

Solution: Implement a sustained public investment program with counter-cyclical spending to stabilize employment.

• Implementation:
  • Create a Permanent Public Works Fund (PPWF) with $1 billion annually (1935–1940), funded by raising the top income tax rate from 63% to 70%, sustaining 2 million WPA/PWA jobs yearly.
  • Establish a Federal Employment Reserve Board to monitor unemployment and adjust spending, targeting below 10% by 1938.
  • Expand rural electrification to 5 million households by 1940 with $500 million in loans to cooperatives.
• Feasibility: Feasible with FDR’s political capital and Revenue Act of 1935 precedent. Rural electrification builds on TVA’s success.
• Expected Impact: Reduce unemployment to 8% by 1938, avoiding the 1937 recession. Rural electrification could boost farm productivity by 20%, raising farm income by $1 billion annually.
• Moral Algorithm Alignment: Enhances safety and prosperity by stabilizing employment and extending benefits to rural areas.

3. Addressing Uneven Prosperity

Weakness: The AAA favored large farmers, displacing 200,000 tenant farmers (many African American). Rural areas, especially the Dust Bowl, saw limited relief, skewing prosperity toward urban workers.

Solution: Reform agricultural subsidies to prioritize small farmers and expand rural relief.

• Implementation:
  • Amend the AAA to cap subsidies at $10,000 per farm, redirecting $200 million annually to small farmers and tenants via loans and land programs.
  • Expand the Farm Security Administration (FSA) to provide lease protections and cooperative farming for 100,000 tenant farmers by 1938, funded by $150 million from AAA budgets.
  • Create Rural Relief Boards to distribute $300 million in aid to 1 million Dust Bowl households by 1937.
• Feasibility: Viable with progressive Democratic support and FSA’s existing framework.
• Expected Impact: Reduce tenant evictions by 50%, stabilizing 100,000 households. Rural relief could increase farm income by 10% in Dust Bowl states, narrowing the urban-rural income gap (urban workers earned 30% more in 1935).
• Moral Algorithm Alignment: Promotes prosperity by reducing inequality and supporting rural opportunity.

4. Addressing Political Polarization and Social Tensions

Weakness: Conservative opposition and labor strikes (e.g., 48 million strike days in 1936) strained cohesion. Exclusions fueled racial and gender tensions.

Solution: Launch a national unity campaign and strengthen labor mediation while ensuring inclusivity.

• Implementation:
  • Fund a $50 million National Unity Campaign (1935–1938) through WPA cultural programs, producing radio broadcasts, films, and events reaching 50 million Americans.
  • Establish a Federal Labor Mediation Board to resolve 80% of strikes within 30 days, modeled on the Wagner Act.
  • Integrate anti-discrimination clauses into all programs, enforced by the Federal Equity Board.
• Feasibility: WPA cultural programs and Wagner Act provide models. Anti-discrimination measures face resistance but are possible with FDR’s leverage.
• Expected Impact: Reduce strike days by 30% and increase New Deal approval from 70% to 80%. Inclusive policies could boost African American and female participation by 15%.
• Moral Algorithm Alignment: Enhances happiness by fostering cohesion and reducing tensions, aligning with Aristotle’s civic virtue.

Conclusion: A Refined New Deal

The New Deal earned a 7.5/10 under the Moral Algorithm, reflecting its transformative impact: a 63% GDP increase, unemployment reduction from 25% to 14.6%, a Gini coefficient drop from 0.45 to 0.38, and 8.5 million WPA jobs, alongside cultural and infrastructural advancements. However, exclusions, incomplete recovery, uneven prosperity, and social tensions limited its alignment with the common good.

The proposed solutions—expanding protections, sustaining investment, reforming agriculture, and fostering unity—address these flaws. By including marginalized groups, stabilizing employment, balancing prosperity, and reducing tensions, these measures could raise the New Deal’s score to 8.5/10, ensuring a more equitable, stable, and cohesive recovery. Implemented within the 1930s’ constraints, they leverage FDR’s political capital and existing frameworks, offering a blueprint for a New Deal that fully embodies Adams’ vision of governance for the protection, safety, prosperity, and happiness of all.