The New Economy:
- The New Deal Happened Because the Grassroots Made it Happen
The New Deal Happened Because the Grassroots Made it Happen
Roosevelt didn’t come up with all those progressive programs on his own.
During the Great Depression, my grandfather ran a butter creamery in rural Minnesota. Growing up, I heard how a group of farmers stormed in one day and threatened to burn the place down if he didn’t stop production. I had no idea who those farmers were or why they had done that—it was just a colorful story.
Now I know that they were with the Farmers’ Holiday Association, a protest movement that flourished in the Midwest in 1932 and 1933. They were best known for organizing “penny auctions,” where hundreds of farmers would show up at a foreclosure sale, intimidate potential bidders, buy the farm themselves for a pittance, and return it to the original owner.
The action in my grandfather’s creamery was part of a withholding strike. By choking off delivery and processing of food, the Farmers’ Holiday Association aimed to boost pressure for legislation to ensure that farmers would make a reasonable profit for their goods. Prices were so low that farmers were dumping milk and burning corn for fuel or leaving it in the field.
The Farmers’ Holiday Association never got the legislation it wanted, but its direct actions lit a fire under politicians. Several governors and then Congress passed moratoriums on farm foreclosures. President Franklin Delano Roosevelt, telling advisors that he feared an “agrarian revolution,” rushed through reforms that helped millions of farmers stay on their land. These new policies regulated how much land was planted or kept in reserve. Although it was eventually replaced by the massive subsidies that today favor large agribusiness and encourage overproduction, Roosevelt’s original program supported some of the most prosperous and stable decades for U.S. farmers.
This is just one example of how strong grassroots organizing during the last severe U.S. economic crisis was key in pushing some of that era’s most important progressive reforms. Social Security is another such case.
The Farmers’ Holiday Association aimed to boost pressure for legislation to ensure that farmers would make a reasonable profit for their goods.
The Depression had been particularly tough on the elderly, millions of whom lost their pensions in the stock crash and had few options for employment. Roosevelt, however, felt the nation was not ready for a costly and logistically challenging pension program.
Then a retired California doctor named Francis E. Townsend wrote to the editor of his local paper, proposing a pension system that would also stimulate the economy by offering $200 per month to every citizen over 60, on the condition that they spend the entire amount within 30 days. The idea spread like wildfire. Thousands of Townsend Clubs around the country wrote millions of letters to the President and Congress demanding the pension system Townsend suggested.
Roosevelt, reportedly concerned that Townsend might join with populist Louisiana Senator Huey Long to challenge him in the 1936 election, eventually changed his position. Although he rejected the details of the Townsend Plan, Roosevelt pushed through legislation in 1935 that created Social Security, still one of the country’s most important anti-poverty programs.
Seventy-five years later, these stories offer important lessons for a country again mired in economic crisis. Neither the Farmers’ Holiday Association nor the Townsend Clubs got exactly what they wanted. But their bold demands and action moved the policy debate much further than it would have gone had these social movements not existed.
Like President Barack Obama, Roosevelt was an extremely popular leader, particularly among the disadvantaged who saw him as their champion. But it wasn’t enough to have a generally good guy in the White House. Likewise today, our chances of achieving real change have more to do with the power of social movements than with the occupant of the Oval Office. Obama has opened some doors of opportunity, but to go beyond economic recovery to a more just and sustainable economy, we’ll need to follow in the footsteps of Depression-era activists and organize around bold ideas.