Introduction: The left into power

This chapter analyzes the response to the Great Depression at its epicenter. It also serves as a case study of the rise of social citizenship across the north of the world, analyzed more generally in the next chapter. During the 1930s, the United States granted increased social-citizenship rights boosting employment, welfare policies, union rights, and progressive taxation. The United States had hitherto lagged in these respects; now it played catch-up in devising a normal lib-lab welfare regime. It was no longer very different to other advanced countries, only exceptional in the timing of its catch-up. In this chapter, I discuss its extent, causes, and immediate effects. The causes are simple: above all, the need to play catch-up was caused by the Great Depression. As we saw in the previous chapter, this hit the United States hard. World War I had only produced a slightly conservative response in the United States, unlike most countries, but the Depression substituted for it as a radicalizing influence.

The second cause – and together these two offer a virtually sufficient explanation – was political. Depression had an almost uniform political effect across the world. Regimes in power at its beginning were discredited and fell, whether they were of the left or the right. In Sweden and Denmark, Conservative governments fell, and a Social Democrat-Agrarian Party alliance used Keynesian policies to affect recovery – and entrench the Social Democrats as the normal party of government for most of the century. In Canada, a Conservative government proposed progressive reforms, but nonetheless elections swept it out of office, and its Liberal successor inherited its reform policies. In Britain, the Labour government split, fell, and remained out of office until 1945. The Australian Labour government also fell, also delaying reform, but in New Zealand, the opposite happened: the Conservatives fell and Labour passed reforms. These were all institutionalized democracies; governments were replaced peacefully through the electoral process. The great virtue of institutionalized liberal democracy and political citizenship was that it was self-sustaining. Newly minted democracies and semi-democracies were more vulnerable. Governments held responsible for the Depression lost elections, but also often suffered coups. In Japan, a centrist government fell, and its rightist successor brought recovery by leaving the gold standard and embracing authoritarian militarism.