Faizaan Butt 13T4
Q) ‘Laissez-faire economic policies were the most significant reason for the decline in Republicanism
1929-32’. How far do you agree?
The decline in Republicanism between 1929 to 1932 was incredibly rapid following the stock market
crash in late 1929. With a ‘decline in Republicanism’ being considered the changing dominant
political party in the US from Republican to Democrat (in terms of both presidential and
Congressional inclination), it may certainly be said that laissez-faire economic policies were an
incredibly significant reason contributing to the decline in Republicanism, due to their fundamental
role in creating the economic conditions which allowed for the crash to occur. However, other
factors, such as the economic appeal of Roosevelt’s New Deal, compounded by his political prowess,
certainly contributed to the rapidity of the decline. Ultimately however, it was perhaps most
significantly the combination of Hoover’s exacerbation of laissez-faire economic policy, and the
extension of that attitude into politics, that made the final decline in Republicanism in the 1932
elections inevitable – Republican attitudes had become intractably unsuited to the economic, social
and political conditions of the Great Depression.
Republican economic policy in the 1920s was fundamentally defined by the attitude of having less
government intervention in business – as such, it favoured private companies, big business and
resulted in rapid economic growth and the proliferation of prosperity throughout the country’s
economic centres. However, the distinct lack of regulation in key strategic industries – most
significantly, between 1929 and 1932, the banking industry – led, arguably inevitably, to the
culmination of buying ‘on-the-margin’ by investors and the re-investment of clients borrowed
money on stocks by banks: the Wall Street Crash in October 1929. The impact of the crash on the
decline in Republicanism is direct; it created the conditions within which the stark vulnerabilities and
unpreparedness of laissez-faire policy were exposed, and led to an immediate swing to the liberal,
innovative policies campaigned by Roosevelt and the Democratic party. Indeed, the fact that
Roosevelt won 44 states in the 1932 election demonstrates the widespread shift to the left; the
severity of the Wall Street Crash and following depression and its impact on the whole of the
country is thus fundamental in explaining possibly the most fundamental reason for the national
shift towards the Democrats – the economic consequences of laissez-faire policy was so significant
