Abstract

"Unmaking a New Deal: Resistance to the NRA and the Origins of Small-Business Economic Conservatism"

Robert Kaminski, Drew University (robert.p.kaminski@gmail.com)

Historians have increasingly recognized the role economic concerns played in the rise of America’s postwar conservative movement, particularly emphasizing big-business efforts to undermine New Deal liberalism from its origin in the 1930s. This focus on the business elite has left largely unanswered the question of why economic conservative thought found a receptive audience in large parts of the broader public during the postwar years. This paper will trace how proprietors of small businesses developed a folk public-choice theory in response the National Recovery Administration (NRA) regulations. To do so, it will focus on restaurateurs and dry cleaners—who operated in trades that were largely populated by small, unit-enterprises. At first, these small proprietors were receptive to the NRA’s effort to establish codes dictating minimum wages and prices—a fair-trade ambition with a long legacy in the anti-chain store movement. But they quickly came to oppose the codes’ practical operation. They concluded that the NRA’s wage and hour rules would prove unsustainably expensive and that its restrictions on their ability to compete on price would disproportionately hurt small firms as well. Fearing bankruptcy and often feeling harassed by NRA officials, thousands of small restaurateurs and cleaners began ignoring NRA codes. Their decisions left rivals with little choice but to do the same, rendering NRA codes a dead letter months before 1935’s Schechter v. U.S. struck them down as unconstitutional. As their resistance unmade the first New Deal, these small proprietors increasingly articulated a folk public-choice theory. This vision framed big government as a tool of special interests wielded against “the little fellow”—foreshadowing later arguments by right-leaning economists and small business’s embrace of them.