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The Grapes of Government Wrath: How the New Deal Deferred the Fruits of Our Labor

“What happens to a dream deferred? Does it dry up like a raisin in the sun?” – Langston Hughes, 1951.  

As we get ready to celebrate Labor Day, I wonder if our labor and property are truly protected by our Constitution. This summer Marvin Horne, a raisin farmer, challenged the U.S. government for taking away his full rights to grow, harvest, and sell all of his raisins. Why would the government be opposed to someone putting raisins into the marketplace? As American’s we are taught property is protected under our Constitution. However, many progressives have come to believe government has an expanded power to take and regulate private enterprise. This practice became popular during Franklin Roosevelt’s New Deal and still haunts us today.

So what does Marvin Horne have to do with the New Deal? This summer Horne was on trial for not giving the National Raisin Reserve (NRR) its share of raisins. In response Horne was fined $650,000 and a levy of 1.2 million pounds of raisins, the equivalent of four years of his entire harvest. FDR’s nonsensical New Deal central planning schemes set out to distort the free market. The New Deal’s Agricultural Marketing Agreement Act (AAMA) of 1937, the origin of the NRR, gave the federal government authority to collectively influence the supply, demand, and price of a particular farmed commodity. While private industry is banned from the practice of price fixing cartels by the Sherman Act, government has not played by these rules. The NRR forced farmers to give away nearly half of their crops without guaranteed payment. Most years the NRR did not pay for the raisins because of lack of funds after administrative costs. Horne simply stopped complying because he felt that he had the right to fair compensation. The Agriculture Department’s argument against Horne was that they help farmers by impeding an over saturated market, which is supposed to lower the price for the consumer. But while some of the raisins find their way into school lunches, most are dumped on government lands to rot in the sun.

The NRR scheme is “small raisins” in FDR’s cereal bowl of bad central planning still popular today amongst progressives. Many history teachers falsely claim this central planning works—arguing FDR got us out of the Depression, and saved capitalism from itself. Yet, contrary to popular belief, FDR’s New Deal worsened the Depression according to researchers Harold Cole and Lee Ohanian. Their study found just one agency known as the National Recovery Act (NRA) accounted for 60 percent of the Depression’s weak economy, and had it never been enacted the Depression would have ended in 1936 instead of 1943 at the onset of the war.  Even Henry Morgenthau—FDR’s Secretary of Treasury—looking back at the period from 1932 to 1940 stated, “I say after eight years of this Administration we have just as much unemployment as when we started. […] And an enormous debt to boot!”  Morgenthau was a part of the FDR Administration’s “Brain Trust” which used childish pranks such as raising the price of gold 21 cents because “three times seven is a lucky number.” When food was scarce and people were starving, FDR had farmers destroy food to inflate farm income. In the book “The Grapes of Wrath,” author John Steinbeck eloquently captures the plight of starving people and government malfeasance by stating “they stand still and watch the potatoes float by, listen to the screaming pigs being killed in a ditch and covered with quick-lime, watch the mountains of oranges slop down to a putrefying ooze; and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath.”

FDR’s New Deal wasn’t just bad policy; it made ordinary citizens into criminals. In 1934 in Jersey City, NJ, a Polish immigrant tailor named Jacob Maged was arrested. The crime? He offered ironing services for 35 cents for his working class customers instead of the 40 cents required under the NRA code. In 1935, the Schechter brothers who ran a poultry business in Brooklyn, were sued by the government because they allowed their customers to select the chickens they wanted—the government insisted the customer had to place his hand in the coop and select the first chicken that came to hand.  In 1942, Ohio farmer, Roscoe Filburn grew some extra wheat for his family. FDR’s Administration successfully sued Filburn, stating he would have had to buy this food had he not grown it. Thus, the government now could regulate a non-commercial activity, in this case, Filburn’s own family dinner table.

In one of his most memorable fireside chats, FDR talked about the Forgotten Man. The Forgotten Man phrase came to define FDR, the New Deal, and the government’s new expanded role in helping the poor. FDR borrowed the phrase from William Sumner, a 19th century Yale Economist. Author Amity Shlaes explains that Sumner’s argument was actually the polar opposite. Shlaes explains:

Sumner said a wants to help x, with x being the man at the bottom. And b wants to help x too. That’s our philanthropic impulse, we want to help. There’s nothing wrong with that. We all have that impulse to provide charity. It becomes a problem when a and b get together and pass a perhaps-dubious law that coerces c into funding their maybe-good project for x. In Sumner’s original version, c is the forgotten man, the man who pays, the man who prays, the man who is not thought of.

Recently, the raisin case was found unconstitutional. Yet, it is another reminder that the New Deal policies did not save our Constitution, our institutions, capitalism, or the economy. Rather it perverted them, made them less efficient, more bureaucratic—and less about individual rights than about vile constituency-based politicking coupled with the consolidation of government power. The New Deal destroyed businesses, jailed private citizens, and took away many of our God-given liberties of work and the pursuit of happiness. The New Deal wasn’t just a dream deferred.  It was a nightmare.  Just ask the real Forgotten Man, Marvin Horne.

  • Greg_Rehmke

    Good discussion of these very strange New Deal policies. Maybe would be helpful to include discussion of what motivated these policies. That it, the view of economist with Administration that sharp economic decline was caused by overproduction pushing agricultural prices down. Raisins are withheld to try to keep prices up. The New Deal destruction of goods was to reduce supply to keep prices up, as the economic advisors felt high prices would stimulate demand and help restart the economy. The claims seems plausible, in that higher wages and higher prices for goods and services would, in theory, provide more buying power for people and companies. And of course these new economic theories were and are flawed.

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