A New Deal Flop

C. J. Maloney’s debut book, Back To The Land: Arthurdale, FDR’s New Deal, and the Costs of Economic Planning, is a compelling history of one of the government’s most radical, if largely forgotten, domestic programs. On the heels of the Great Depression, FDR embarked on an ambitious plan to resettle some of the nation’s most impoverished citizens. The greatest example of this is found in West Virginian coal-mining country, where as part of the New Deal, a small town named Arthurdale was built from the ground up, using public monies. The people who would come to inhabit this town were, at the time, among the poorest in the country, many living in destitution in Scott’s Run, where employment had largely disappeared as demand for coal screeched to a halt. Labeled by the most influential member of the project, First Lady Eleanor Roosevelt, as a “human experiment station,” Arthurdale was conceived as a way to lift people out of poverty, while creating a symbol for the benefits of New Deal economics. Instead, as Maloney details, the creation of Arthurdale was disastrous. A devastating tale of the dangers of government intervention, regulation, and control, the story of Arthurdale is one of unfettered spending, poorly executed planning, lack of employment, and a restriction of individual autonomy perhaps unparalleled in America’s history.

Maloney has managed to finely balance the duties of the historian with the role of storyteller. Instead of being bogged down by the (impeccable) research that provides the book with so much valuable detail, he uses this plethora of information to strong effect, highlighting the human stories and the bigger picture impact that Arthurdale had on both the area and the country, so that the reader feels less like he is reading an economic history than a fascinating story with a profound historical lesson. The writing has a smoothness and ease that evades most books of similar historical depth.

While there is little doubt that the work has a decidedly anti-government bent, what is refreshing about the book is that it refuses to venture into the conspiratorial and often childish tone that so many government-fearing people have introduced into the political discourse in this country. When discussing the people in charge of Arthurdale, Maloney criticizes them on the merits of their ideas, while stating, “This is not to say that those who initiated the subsistence homesteads were evil-minded men; the truth is quite the opposite.” Instead of doubting their “good intentions” he attacks the results of them, and the result is a scathing, but legitimate critique of the role of government. Perhaps even more importantly, the book reveals a great sympathy and understanding for the impoverished people who signed up to live in a government-funded town. There is no notion presented that these citizens were in anyway freeloaders, coasting on handouts; instead there’s an honest admission that “Those resettled at Arthurdale cannot be blamed for jumping at the chance to improve their families’ circumstances…who can cast a stone at all the parents who accepted the chance to move into Arthurdale?” By sticking to the astonishing historical record, Back To The Land avoids the pitfalls that plague the ideologues who too often direct the national debate. Ultimately, what makes the book so successful is that the story is able to speak for itself.

Recently, the Rail spoke with Maloney about the book.

Michael Terry (Rail): You write in the book, “the future seeds of what America has become were planted at Arthurdale.” In what way did Arthurdale help to shape the America of today?

C.J. Maloney: Arthurdale was the first and most intimate “social experiment” ever conducted by the Federal authorities. In the words of Eleanor Roosevelt it was a “human experiment station,” designed to “improve” on the raw material, the people, resettled there. That idea, that the political authorities have the right to “improve” on people, is now gospel in America’s political landscape.

Rail: The tale of Arthurdale shows the federal government taking substantial control over the lives of some of its citizens. While you argue that this experiment went way too far, you also mention that most of the people of Arthurdale appreciated much of the help provided (alleviating crushing poverty, providing educational resources, etc.). How best could the government have provided these things while allowing the people of the town retain their autonomy and individualism?

Maloney: The fact that the federal politicians provided these things at all destroyed the peoples’ autonomy and individualism. A political class that does not respect the law (as they had no authority under the Constitution to create Arthurdale) holds no respect for the people as autonomous individuals. That being said, the best case scenario would have been for the Federal authorities to build the town, and then turn title to it over to the resettled and simply walked away.

Rail: The scene you paint of this area before Arthurdale is not an appealing one. Much of the suffering of these very people seems to have come from private entities also taking control of parts of their lives. For example, the mining companies created a different currency, in which its workers were paid, and they were forced to shop at the mining companies stores, often at inflated prices. Do you have more or less confidence in large scale private ventures than you do public projects? Is the main problem with the work of the state that it is done with taxpayer money, or does it go further than that?

Maloney: The abuse of the workers by the private coal companies was aided and abetted by the West Virginian political authorities who refused to hold those companies to the law, especially in regard to the blatantly illegal practice of “paying” their workers in useless company “script.” Private companies are far preferable to the State running the economy. As Leon Trotsky warned us, in a world where the political authorities control the economy, “The old principle: who does not work shall not eat, has been replaced with a new one: who does not obey shall not eat.”

Rail: In your book, you discuss the massive waste of money that came along with the Arthurdale project. Poor land surveys, overpriced housing, huge labor costs, delays in construction, and more. Do you feel that infrastructure programs run by the state have improved since the time of the New Deal?

Maloney: No. The problem is inherent in government projects. There is no feedback loop, as there is no profit and loss. There are no customers, as the State has a monopoly on whatever it does. Any politically run project does not put efficiency and the customers first—it puts political considerations and pleasing the next hire up in the chain of command first. There is no getting around this.

Rail: Do you think that a project as ambitious as Arthurdale could get approval today?

Maloney: No. The project was massive, luxurious, and experimental. You would need to imagine a housing project today, built on prime seaside property, with each unit equipped with flat screen TVs, Jacuzzis and in-ground pools. Arthurdale was a one shot deal.

Rail:It seems like the people you talk about in this book were really only secure in employment and wages during the two great wars. Should we admit that we need to create jobs through military spending?

Maloney: That is one of the most dangerous, and reactionary, economic myths extant. In order for the political class to spend money, they must first take it away from the working masses. Frederick Engels, in his masterful The Role of Force In History, hit on this truth when he noted, “force, however, cannot make any money; at most it can only take away money that has already been made.” All government spending by its very nature reduces private spending to the exact same degree. Ask yourself, if we put everyone into a military uniform, where would we get the money to pay for it all?

Rail:What is the key lesson people should learn from the Arthurdale experiment?

Maloney: That the more you allow the political class to “plan” for the workers, the less the workers will be allowed to plan for themselves.