July 1, 2024


Remembering “The Forgotten Man”

By: Thomas Savidge

Looking for beach reads this summer, but fiction or romance just isn’t your thing? Check out Amity Shlaes’s 2007 hit The Forgotten Man: A New History of the Great Depression (for any comic book fans there’s also a graphic novel) as well as her 2023 edited volume New Deal Rebels: An Anthology of Critics of the New Deal. Shlaes’s works offer a history of the Great Depression without any of the fiction or romance from the typical U.S. History class.

For context, the typical U.S. History class summary of the Great Depression goes something like this:

When the Crash of 1929 happened, President Herbert Hoover (a dogmatic laissez faire supporter) did nothing until right before the 1932 election, and his actions were too little, too late. Fortunately, President Franklin D. Roosevelt won the White House in 1932, ushered in the New Deal (allowing government to tame the out-of-control market) and ended the Great Depression. Anyone who opposed the New Deal was an opportunistic demagogue. 

Shlaes turns this summary on its head and offers an engaging analysis of the Great Depression and the New Deal.

In an EconTalk interview (great beach listening), Shlaes notes that “Hoover’s philosophy was free market…but his temperament trumped his philosophy. He was a control freak.” He urged businesses not to layoff people, signed onto the Smoot-Hawley tariff, and generally “believed spending would help (Keynesian style though without talking to Keynes).”

Both Forgotten Man and Rebels present William Graham Sumner’s lecture “The Forgotten Man.” Sumner notes that when person A notices a wrongdoing from “which X is suffering,” and A consults person B about what should be done. A and B agree to pass a law to decide “what A, B, and C shall do for X” without ever consulting person C. Person C is the forgotten man. Sumner comments, “He works, he votes, generally he prays—but he always pays…”

In regard to FDR, Arnold Kling notes that Forgotten Man reveals two things about the 32nd president. Kling finds that, “1) Franklin Roosevelt had no coherent economic strategy. 2) He had a very coherent political strategy, which was to use government spending to forge strong links with electoral constituencies, in a way that was analogous to urban machine politics.” This is abundantly clear with the uncertainty that stemmed from the New Deal.

Shlaes shows that by imposing heavy-handed rules and regulations, the government created an environment of uncertainty for businesses, discouraging investment and innovation (what economist Robert Higgs would later call “regime uncertainty). That same uncertainty is echoed in Rebels in Alf Landon (the Republican presidential nominee in 1936), criticizing the New Deal for how difficult these policies made it to start a business. This resulted in what she calls “a depression within the Depression” during the late 1930’s.

In Forgotten Man, Shlaes includes well-known political figures like Roosevelt as well as the often-overlooked individuals who suffered under these policies, the living examples of Sumner’s “person C.” Through their stories, Shlaes illustrates the unintended consequences of the New Deal, highlighting how businessmen faced burdensome regulations and tax policies that hindered their ability to expand and create jobs. This focus on the real-life impact of government policies adds a human dimension to her critique, making her economic arguments more tangible and relatable.

Rebels highlights the voices of those who resisted the New Deal’s expansive government reach and fought to preserve economic liberty from all walks of life. These “rebels” included politicians, businessmen, and intellectuals from all walks of life who argued for free market principles and warned of the dangers of an overbearing federal government. Historian Tanner Corley notes, “Shlaes provides abundant evidence that not all Americans embraced the expansion of government and its new role in the economy that the New Deal wrought.”

Contrary to what history classes frequently teach, opposition to the New Deal was not unfounded and its critics could not all be written off as cranks and demagogues. Numerous critics, including several entries from AIER founder Colonel Edward Harwood, show the disastrous effects that FDR’s New Deal was having on the average American. Perhaps the most damning critique of FDR came from John Maynard Keynes. While Keynes generally supported the New Deal, even he admitted that FDR excessively antagonized businessmen and that FDR was mistaken “to think they are more immoral than politicians.”

These books also offer a means for understanding America today. After the Great Depression, policymakers’ knee-jerk reaction has become “intervene.” They often disregard both the seen and unseen costs of intervention, accusing anyone who objects as heartless. As AIER President Will Ruger notes in the afterword of Rebels, “we still live in the New Deal world created by the Roosevelt administration.”

Amity Shlaes’s The Forgotten Man and New Deal Rebels are must-reads for any fan of American history.