capitalism

Nietzsche, Friedrich (1844–1900) 355
Survivors Insurance. The Social Security Act also established
the federal-state unemployment insurance system
and federal welfare aid to the poor and blind.
Perhaps more important at the time was the Wagner
Act, which created a federal agency, the National Labor
Relations Board (NLRB), with the power to investigate
and decide on charges of unfair labor practices and to conduct
elections in which workers would decide whether
they wanted to be represented by a union. If the workers
voted in favor of a union, it became the workforce’s collective
bargaining agent, and the employer was required to
bargain with it “in good faith.” Organized labor became a
key component of the New Deal coalition, and, under the
encouragement of the openly pro-union NLRB, its ranks
grew rapidly, rising from about 3 million in 1934 to almost
9 million in 1940 (about 27% of the nonfarm labor force).
Although the organizing effort sparked some violence,
basic industries such as automobiles and steel were soon
largely unionized. Placing a right to collective bargaining
above private property rights, in 1936 and 1937, New
Deal–supporting governors and other elected officials in
Michigan, Ohio, Pennsylvania, and elsewhere refused to
send police to evict sit-down strikers who had ignored
court injunctions by seizing control of factories. These
actions by some states allowed the minority of workers
who actively supported unionization to use force to overcome
the passivity of the majority of workers and the
opposition of the employers.
The New Deal philosophy had a clear element of class
warfare, seemingly wresting power and resources from the
rich and giving them to those with fewer resources in the
form of collective bargaining rights, government transfers,
and, under the Fair Labor Standards Act of 1938, minimum
wages and overtime premiums. The New Deal coalition
attacked “economic royalists” and threatened to “soak the
rich” as the top federal income tax rate climbed from 25%
in 1931 to 79% in 1936. Critics complained that the government’s
rhetoric and actions caused investors to fear for
the security of their property rights, pointing to the 60%
jump in investment after electoral defeats for the New Deal
coalition in 1938.
The most important legacy of the New Deal is probably
the substantial expansion of the scope of government that it
brought. Economic historian Robert Higgs has argued convincingly
that this response to the Great Depression brought
with it accommodative court rulings, ideological changes
within the electorate, bureaucratic self-interest in maintaining
programs, loss of understanding of what can be accomplished
in the private sector, and simple inertia that together
permanently ratcheted up the size of the government.
See also Great Depression; Interventionism; Labor Unions; Price
Controls; Social Security
RoW
Further Readings
Alexander, Barbara. “National Recovery Administration.” Robert
Whaples, ed. EH.Net Encyclopedia, 2001.
Bordo, Michael D., Claudia Goldin, and Eugene N. White, eds. The
Defining Moment: The Great Depression and the American
Economy in the Twentieth Century. Chicago: University of
Chicago Press, 1998.
Couch, Jim, and William F. Shughart II. The Political Economy of
the New Deal. Cheltenham, UK: Edward Elgar, 1998.
Fearon, Peter. War, Prosperity and Depression: The U.S. Economy,
1917–45. Lawrence: University Press of Kansas, 1987.
Fishback, Price V. Government and the American Economy: A New
History. Chicago: University of Chicago Press, 2007.
———, Shawn Kantor, and John Wallis. “Can the New Deal’s Three
R’s Be Rehabilitated? A Program-by-Program, County-by-
County Analysis.” Explorations in Economic History 40
no. 3 (October 2003): 278–307.
Higgs, Robert. Crisis and Leviathan: Critical Episodes in the
Growth of American Government. New York: Oxford University
Press, 1987.
Rosen, Elliot. Roosevelt, the Great Depression and the Economics of
Recovery. Charlottesville: University of Virginia Press, 2005.
Weinstein, Michael. Recovery and Redistribution under the NIRA.
Amsterdam: North-Holland Publishing, 1980.
NIETZSCHE, FRIEDRICH
(1844–1900)
Friedrich Nietzsche was one of the most controversial writers
of the 19th century. He left a remarkably ambiguous
legacy for political thought, and his sweeping and often
cryptic denunciations of existing institutions inspired a
wide variety of thinkers, including both libertarians and
many others who were profoundly hostile to libertarianism.
His own views on liberty and the state are subject to a
wide variety of interpretations. In his early account of
Nietzsche’s philosophy, H. L. Mencken interprets him as a
sort of anarchist. There is certainly some reason to see
Nietzsche in that way; he refers to himself repeatedly as
“antipolitical,” which must be rather different from being
merely “apolitical,” and he has blisteringly caustic things to
say about the state in his Thus Spoke Zarathustra.
However, in virtually all the writings of his mature period,
he describes his own standard of value as the “Will to
Power,” a view that might be paraphrased as viewing power
as a good or possibly the highest good. However, Walter
Kaufmann, writing in the early 1950s, read that notion to
mean that power over others is relatively unimportant, with
true power being mastery over one’s self. Undeniably,
Nietzsche does have a high regard for people who have
self-mastery, but his admiration is consistent with advocating
power over others as well, and Nietzsche does describe
his ideal human beings as molding humanity according to