180 ChaPter^4
and maximum hours requirements, and established the right of workers to
create unions in Section 7a, it was more an expansion of Hoover’s trade asso-
ciation concept. FDR, noting that production had grown tremendously in the
1920s, wanted to lower industrial output and thereby raise prices, assuming
that this would create more profits for factory owners who could then expand
their operations and bring on workers at decent wages. There was not a
single thought given to redistributing power or wealth. FDR appointed Hugh
Johnson, an admirer of the system of “corporatism” in Italy and Germany, to
head the NRA and he thought such policies might work in the U.S. too.
Corporatism—which came to be known as fascism in Europe—was an eco-
nomic system, much like the trade association idea that brought together firms
in the same industry to create codes to regulate themselves, with government
cooperation. Indeed, Herbert Hoover himself deemed the NRA “fascist”
[without, of course, the oppressive attacks on certain groups or the restrictions
on liberty and freedom that defined Mussolini’s and Hitler’s political views].
In Johnson’s conception, FDR would have had virtually had the power of a
dictator to run the economy. That, of course, did not happen. FDR in fact
relied on industrial titans, particularly Gerald Swope of GE, Charles Schwab
of Bethlehem Steel, Henry Harriman, president of the Chamber of Commerce,
and E.H. Harriman of the Union Pacific Railroad, to set up the NRA. The
agency allowed industries to get together and establish codes for themselves,
made it legal to create monopolies, and let firms, especially the largest ones,
set up rules regarding production and pricing. The key goal was to limit pro-
duction and thereby inflate prices, which, New Dealers argued, would lead to
more business, more companies reopening, more jobs, and more purchasing.
Some critics called it government “of big business, by big business, and for big
business.”
Like the trade associations, groups of individuals who headed large indus-
tries would sit down with the government and plan out economic policies,
obviously to their benefit. They could then set rules on how much could be
built [how many cars, how much steel, how much coal, and so forth] and set
prices at which they would be sold [which would be set artificially high to
create greater profits]. To use an example that may seem slight but is telling,
broom makers in their NRA association created codes to require that brooms
be made a certain width and length. Smaller companies often could not
afford to make changes in their machinery to meet the new rules, so went out