For once a utopian vision seemed to correspond
to reality. Sweden and its people prospered.
Swedish research, technology and design were
second to none. The Social Democratic domin-
ance for all but six years since 1932 came to an
end only in 1992.
Sweden exemplified a distinctive and much
admired social, political and cultural way of life.
The emphasis on closeness to nature and on indi-
vidual choice and liberty extended to the sphere
of sexual permissiveness long before it did so in
the rest of Europe. In many areas of social reform
Sweden was the pioneer. The Swedes enjoyed one
of the highest standards of living in Europe,
along with the Swiss, the Norwegians, the Finns,
the Germans and the people of Luxembourg.
Swedish society was egalitarian and unshakeably
democratic, although it had to make readjust-
ments in the early 1990s.
The hopes of those who continued to pin their
faith on liberalism and democracy in the 1930s as
providing a better answer to the world’s ills than
totalitarian leadership, came to rest on Franklin
Delano Roosevelt. Roosevelt’s New Deal was
to be the answer to those who, in the crisis,
despaired of reconciling freedom with the meas-
ures necessary to bring about economic recovery.
Keynes wrote in December 1933 that Roosevelt
had made himself ‘the trustee for those in every
country who seek to mend the evils of our con-
dition. If you [Roosevelt] fail, rational change will
be gravely prejudiced throughout the world,
leaving orthodoxy or revolution to fight it
out.’ The shortcomings of the New Deal are very
evident to historians today. Unemployment
remained obstinately high. It fell from some 13
million in 1933 to under 8 million in 1937 but
it rose again to 9.5 million in 1939. In fact,
Roosevelt’s administrations failed to ‘cure’ the
blight and waste of human resources until the US
geared industry to war. But the attitude of the
president and administration, brilliantly publi-
cised, gave renewed hope to the nation and pro-
vided leadership without the destruction of
democracy. There is thus a stark contrast between
the general psychological impact of the New Deal
and the real success of the many different laws,
special agencies and programmes which consti-
tuted it.
The depression provided Roosevelt with the
opportunity of attaining and retaining political
power for more than a decade until his death in- But its onset destroyed the political power
of his predecessor at the White House, Herbert
Hoover. Hoover in 1929 had begun his term at
the moment of highest confidence. The failure of
his economic policies to halt the steep rise in
unemployment shattered his reputation. He had
a clear concept of the role of the state. He wished
to limit federal powers, which he warned would
throttle individual initiative. He was by conviction
a conservative, though he was willing to adopt
new ways to stimulate business. His inability,
nevertheless, to halt the steep slide into depres-
sion did more than discredit him personally, it
also discredited the whole philosophy of minimal
state intervention. But Hoover did act to contain
the effects of the onset of the depression. He
appealed to businessmen not to contract their
activities and to maintain their workforce. He
appealed to the banks to extend credit. Besides
such exhortations, federal policies were limited –
though in the right direction. The nation should
help itself by enlightened voluntary cooperation
between the different interest groups. Prosperity
‘lay just around the corner’.
When the voluntary approach did not work,
Hoover took more energetic steps to influence the
economy. He persuaded the bankers to establish a
National Credit Corporation in October 1931;
the strong banks were to assist the weak and fail-
ing ones. But banks, in their thousands, continued
to close their doors. Business confidence was not
restored. In 1931 Hoover belatedly halted inter-
national financial chaos for a time by calling for
a year’s moratorium of Allied debts to the US;
German reparations also ceased in practice.
Hoover broke with his traditions by establishing
the Reconstruction Finance Corporation in 1932,
empowered to make loans to banks and financial
institutions. That summer he accepted a con-
gressional bill to advance federal loans to individ-
ual states to provide unemployment relief and
public works. The federal budget, despite his mis-
givings, allowed for more state expenditure than