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The severe decline in influence of the southern aristocracy after the Civil War left the capitalist aristocracy without any powerful rivals in setting national economic policy.� Small businesses, with the possible exception of self-employed farmers, generally had little influence on national policies.� Consequently, capitalism grew quickly during the years from the close of the Civil War to World War I.� It was, in many ways, a turning point for American society, in economic, political, and cultural terms.� Capitalism was dominant and would continue to be dominant, setting the course of economic life in post-Civil War had unprecedented economic power in the world.� Government was pro-business, technological changes had lessened the domestic workload in many households, and increasing productivity meant more lax work schedules for those outside of the house.� Furthermore, scientific advances led to better health and a higher average life expectancy and children were going to school and staying for more years than they had ever been able to before, relieved from the some of the pressure to join the labor force as soon as possible and help support the family.� For all of these reasons and others, there was a considerable amount of optimism about the economy.� Nevertheless, in agriculture, where a significant fraction of the population still earned their living, economic conditions for the self-employed farmer continued to deteriorate.� Many self-employed farmers lost their farms, unable to compete in a period of falling farm prices and mechanization of agriculture.� Some of these formerly independent farmers became migrant laborers, further reflecting the continual drift away from self-employment and towards capitalism.� The optimism that had followed the end of World War I was shattered by the sharp decline in the stock market in 1929 marking the end of a speculative bubble in equity prices.� The stock market decline was followed by a decline in the output and employment in the "real economy."� In this new economic landscape, the correct plan of behavior was not at all clear.� Previously, the large scale industrial and financial corporations had encouraged the government to play a limited role in the economy.� maintained this policy in the mistaken belief that the economy would fix itself, but economic recession turned into a deep economic depression.� Millions were unemployed.� Without a social safety net high levels of unemployment quickly turned into homelessness and starvation for many Americans.� The nation was in crisis and and with strong support from labor unions, was elected in an landslide in 1932. administration inaugurated a new chapter in American culture.� Activist government came to be associated, perhaps for the first time, with policies designed to benefit capitalist wage laborers.� In the past, the Hamiltonian brand of activism had been designed to foster the growth of capitalist industrial and financial firms.� 's policies were called the New Deal.� FDR's New Deal began with legislation establishing federal institutions to regulate the banks, the stock exchange, and utilities.� The hope was that such legislation would restore confidence in 's financial institutions.� The New Deal continued with the passage of the National Industrial Recovery Act which stipulated a federal minimum wage, banned most child labor, and gave the federal government tools for combatting the unemployment problem.� The Wagner act of 1935 was designed to protect the rights of capitalist wage laborers to unionize.� Social security was passed, despite strong opposition from the Republican Party.� It would be a mistake to assume that New Deal legislation was simply a pro-labor set of policies.� The New Deal had its Hamiltonian overtones, as well.� There was, for example, legislation to grant businesses the right to set prices for their industries.� The New Deal also included the Tennessee Valley Authority (TVA) to develop a system that could provide cheap electricity to the nation's rural landscape and under the Agricultural Adjustment Act, the New Deal paid farmers to control prices of their crops by limiting productions and initially destroying "excess" crops and livestock, driving up prices and helping both small and large farmers to generate higher revenues. economy of its most serious economic decline.� As long as the directors and top managers of capitalist firms did not expect revenues and profits to grow, they were unwilling to approve new investment.� The pessimism of these top leaders in the business was only exacerbated by the perception of the administration as leaning too far in favor of labor unions, which were seen as promoting higher cost wage labor.� In the early years of his administration, FDR made matters worse by following 's example and trying to balance the federal budget in a time of declining tax revenues.
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