New Deal

Definition

The New Deal was a series of programs and reforms introduced by President Franklin D. Roosevelt in response to the Great Depression, aimed at providing relief, recovery, and reform to the American economy. This transformative period reshaped the role of government in the economy and established a foundation for modern business ethics by emphasizing social responsibility and accountability in corporate practices.

5 Must Know Facts For Your Next Test

1. The New Deal included key programs like the Civilian Conservation Corps (CCC) and the Public Works Administration (PWA), which aimed to provide jobs and infrastructure development.
2. It marked a significant shift in government policy, moving towards increased intervention in the economy to stabilize markets and protect workers.
3. The Securities Exchange Act of 1934 was part of the New Deal, which established regulations for stock markets to prevent fraud and ensure transparency.
4. The New Deal led to the creation of agencies like the Federal Deposit Insurance Corporation (FDIC), which helped restore public confidence in banks.
5. One of the long-lasting impacts of the New Deal is the establishment of Social Security as a safety net for the elderly and unemployed, influencing modern business ethics around social responsibility.

Review Questions

• How did the New Deal reshape the role of government in relation to business ethics?
  • The New Deal fundamentally transformed the government's role by promoting active intervention in the economy and enforcing regulations aimed at protecting workers and consumers. This shift emphasized the importance of corporate accountability and social responsibility, laying the groundwork for modern business ethics. The establishment of regulatory bodies and programs illustrated a commitment to ensuring fairness and stability in economic practices.
• Discuss how specific New Deal programs reflect a commitment to social responsibility in business practices.
  • Several New Deal programs, such as the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA), demonstrated a commitment to social responsibility by prioritizing job creation and public welfare. These initiatives not only provided immediate relief during the Great Depression but also highlighted the importance of businesses considering their societal impact. The focus on improving infrastructure and environmental conservation illustrated how corporate practices could align with community needs.
• Evaluate the long-term implications of the New Deal on contemporary business ethics and corporate governance.
  • The New Deal had lasting implications on contemporary business ethics by establishing principles of government oversight and corporate accountability that are still relevant today. The creation of regulatory frameworks, such as the Securities Exchange Commission (SEC), set standards for transparency and ethical behavior in business. As a result, modern corporations are expected to operate within a context that balances profit-making with social responsibility, reflecting values rooted in the policies initiated during the New Deal era.

Related terms

Great Depression:

A severe worldwide economic downturn that lasted from 1929 to the late 1930s, characterized by widespread unemployment, poverty, and economic stagnation.

Social Security Act:

A 1935 law that created a system of old-age benefits and unemployment insurance, representing a significant shift towards government involvement in social welfare.

Regulatory State: A concept referring to a government that regulates various aspects of economic life to ensure fairness, safety, and accountability in business practices.