During his passage on the New Deal, William Leuchtenberg criticizes the cyclical nature of capitalism, claiming that this market is too inefficient in correcting imbalances of supply and demand. The cost of this inefficiency is human lives being torn asunder for years as entire industries adjust at once to changes in market conditions, leaving millions without jobs at the same time, for prolonged periods. However, his government-control “solution” introduces the exact same problem! The passage “This is why, though all of us will undoubtedly have moments of discouragement at the slowness of it…” can be applied with equal validity to the existing industrial system or the proposed government takeovers of the “levers” of the economy.
Leuchtenberg bases his argument on the completely unproven theory that the government will be able to control these levers much better than the private sector has been able to, using recent economic failures as his “proof.” In retrospect, this theory becomes laughable when Leuchtenberg touts “efficiency at least as great as that which we now get out of the United States Postoffice,” an institution losing over billion dollars a quarter currently. In addition to putting too much trust into the government, Leuchtenberg further disproves his own theory by bringing up the unwillingness of the American people to accept the federal government commandeering the levers of the economy. He admits that “people do not change their habits easily,” yet there is an implicit expectation that the government will be able to bend them into compliance for this overhaul. Unfortunately for Leuchtenberg, this assumption, much like all the other ones in this article, is unfounded and detached from reality.