Freeman

ARTICLE

FDR, Uncle Fred, and the NRPB

AUGUST 29, 2012 by WARREN C. GIBSON

In Ayn Rand’s epic novel Atlas Shrugged, government officials regulate the economy through something called the Bureau of Economic Planning and Natural Resources. She clearly chose that name to reflect their belief that productive people were bound to produce just because of their “conditioning” and could therefore be treated pretty much like coal in the ground—as resources ripe for exploitation.

One wonders whether she had ever heard of the National Resources Planning Board (NRPB). The NRPB was a real agency, part of the kaleidoscope of bureaus that formed the New Deal. Its history is in some ways as dry as dust, but a closer look reveals some interesting and timeless insights into the planning mentality and the role of personalities in shaping history.

The philosophy underlying Roosevelt’s New Deal, if one can call it that, was to try something and if it didn’t work, try something else. In that same spirit the NRPB mission changed frequently; even its name changed four times before it was killed in 1943. It had been authorized as part of the National Industrial Recovery Act, but that program was ruled unconstitutional in 1935, leaving the National Planning Board, as it was called then, in danger of extinction. It was quickly rescued by FDR, however, and established as an independent agency. Casting about for a new name, one planner suggested “natural resources,” whereupon another commented that human beings were America’s most important resource. “National Resources” was suggested. The President chewed the phrase over a few times, then, pleased with its sound, grinned and announced, “That’s it. Get that down, boys, because that’s settled.”

FDR seems to have enjoyed the monthly gatherings of NRPB board and staff in his office, much as he might have enjoyed a romp with one of his dogs. Marion Clawson, in his book New Deal Planning: The National Resources Planning Board, says the President’s relationships with the board and its officers were “friendly, even cordial.” No wonder, given that FDR had appointed as board chair none other than his uncle Frederick Delano, affectionately known to FDR and much of the NRPB staff as Uncle Fred. The meetings were usually loosely organized and inconclusive, with the President often telling stories or reminiscing. Attendees were left to guess at what the President wanted and sometimes had to follow up with a memo for his approval.

The appointment of Uncle Fred suggests nepotism, but the reality was quite different. He brought a rather impressive résumé to the job: civil engineer, railroad executive, member of the board of governors of the Federal Reserve, and a pioneer in city and regional planning. Clawson reports that Uncle Fred bent over backward to avoid the appearance of capitalizing on his connection to the Oval Office. He was so standoffish with members of Congress that the board never did establish the kind of friendly congressional ties that are essential to any bureaucracy. Nor did he press FDR for favors, as an unrelated chairman might have.

A dilemma haunted the NRPB throughout its life. Its raison d’être stemmed from the realization that the multitude of alphabet agencies that sprang up under the New Deal were insufficiently coordinated, to put it mildly. This meant the NRPB’s scope should have been broad enough to include almost all the functions of the federal government, save perhaps war and foreign affairs. But established agencies were often less than keen to see their turf invaded. The NRPB tried to address that problem by contacting bureaus or agencies they thought might be interested in some new NRPB committee and asking them to nominate members. The board tried to get people from the highest levels of the agencies, but such people tended to skip meetings or send substitutes. Whatever their levels, outside committee members could be a nuisance to the NRPB because they often took a defensive attitude toward what they saw as their agencies’ turf. In later years the board did more of its own work in-house, but that policy tended to isolate it.

What did the NRPB actually produce? Reports. Lots of reports, some quite lengthy, on topics ranging from New England airports to the role of cities in the national economy to industrial plant siting and family budgeting. An example is available online: “Security, Work, and Relief Policies.” In well over 600 pages existing policies are summarized and recommendations are made. It was the product of a committee of bureaucrats, academics, and private charity people, all quite distinguished, we must assume. Of course, distinguished committee members usually do no real work, so one or two long-forgotten staffers must have been the real authors. Consider this, the first of six recommendations that appear on page 545: “Increasing emphasis on policies aiming at the prevention of economic insecurity through a fuller utilization of our productive resources including labor, and by more comprehensive measures to improve the health of our people” (emphasis added). If that sounds like just harmless gibberish, consider that phrase again: “Our productive resources including labor.” There you have exactly the attitude of Rand’s “looters.” Workers are national resources to be manipulated and exploited as government agents see fit. And of course, when central planning doesn’t work, the solution is more planning. “My hands are tied,” says Wesley Mouch, Rand’s looter-in-chief, as the economy collapses. “I need wider powers.”

Bureaucracies seldom die; they usually just morph into a new form. In the case of the NRPB, however, several factors came together to kill the board in 1943. One was the ongoing and understandable fear among many that FDR was leading the nation to some kind of socialism. The NRPB published many short pamphlets that extolled the planning ideal in sixth-grade English. These were propaganda pieces, pure and simple, written in a style that seems almost laughable from today’s sophisticated viewpoint. There had always been considerable distrust among many Republicans and conservative Democrats in Congress of the New Deal in general and the NRPB in particular. To this were added several other factors that finally did in the NRPB.

By 1938 it was becoming evident that war was coming and FDR began shifting his attention in that direction and away from the New Deal, perhaps sensing its failure. By 1942 the NRPB meetings had become biannual rather than monthly. The Republicans scored gains in the 1942 elections, and they, like many Democrats, were not in a good mood when the NRPB made its appropriations request in 1943. During this time Congress felt compelled to rubber-stamp Roosevelt’s requests for war appropriations, making them all the more recalcitrant about domestic appropriations, especially since the New Deal was by then essentially a dead letter, even with the President.

Another factor was the interaction of Uncle Fred with his two principal deputies. Orthodox Marxist theory says the course of history is determined by material productive factors, whatever that means. In fact history often turns on accidents of circumstance or personality, as the end of the NRPB shows. Uncle Fred’s second and third in command, Vice Chair Charles E. Merriam and Executive Director Charles W. Eliot, had been at loggerheads for years. Said historian Arthur Schlesinger of these two, “The tension between them, mounting through the thirties as Delano’s advanced age weakened his leadership, handicapped the committee’s work. . . . Merriam the scholar tended to favor long-term research projects; Delano and Eliot the planners wanted to shape current policies and programs.”

The simmering feud broke out into the open in 1943 when Eliot went behind Merriam’s back to a private meeting with the President to “express my very great concern over Uncle Fred’s sickness, depression, and reaction to attacks in Congress and the press.” This incident may have broken the spirit of the board and, perhaps more important, may have extinguished the last of FDR’s interest in the organization. It may be that FDR sent a quiet signal to his front men in Congress to let the NRPB go. Lacking a champion in the House, the NRPB appropriation was allowed to die and that was that.

A common thread runs through all the NRPB activities and reports: an unquestioned faith in central planning as a requirement of modern life. It is possible that some New Dealers really believed that the only alternative to central planning was chaos, though this faith must surely have been wearing thin for anyone in the late 1930s who took an honest look at the record of the New Deal.

It was just one year after the NRPB’s demise that F. A. Hayek’s The Road to Serfdom burst on the scene. To the great surprise of everyone—perhaps most of all Hayek—the book was a runaway success in the United States. A Reader’s Digest condensed version and a comic book version were published. Sixty years later, it enjoyed renewed popularity, briefly topping the Amazon sales list in 2007. In the book, as many Freeman readers well know, Hayek argues that central planning does not work, that it is inherently undemocratic and is deeply corrosive of political liberty. He takes pains to show that the alternative to central planning is not no planning but rather planning by individuals and families and businesses, each within their own unique spheres of knowledge and interests.

If the 1930s advocates of central planning are to be accorded some slack, not so Mr. Clawson, who in his NRPB history marches straight ahead under the central planning banner. The Road to Serfdom might as well not have been written, Hayek’s Nobel Prize not awarded, Keynesian policy prescriptions not collapsed under stagflation, and Friedman’s Capitalism and Freedom and his Newsweek columns never penned. Charging ahead, Clawson looks forward from his 1981 publication date and compiles a “list of major national problems on which a consistent and competent national policy is urgently needed.” First on his list is, of all things, inflation, somehow to be solved by planners going after greedy businessmen or unions or consumers or anybody but the real culprit, the monetary authority! Of course, Paul Volcker was already at work solving the problem by instituting monetary restraint at the Fed.

The NRPB is dead but has another agency taken its place? Who knows? After counting 123 bureaus and agencies on the list at USA.gov I gave up. And I had only gotten through the letter C! What is certain is that even after the collapse of communism, an event that should have doomed the central planning idea once and for all, the Wesley Mouch types remain undeterred, ever guided by the axiom that planning failures are always to be solved with more planning or better planners. It will ever be thus, I fear, as long as there are among us busybodies eager to seize the reins of government and bedevil us all.

ASSOCIATED ISSUE

September 2012

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WARREN C. GIBSON

Warren Gibson teaches engineering at Santa Clara University and economics at San Jose State University.

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