Paradigm Shifts as Pivotal Moments: The Second New Deal and the Reagan Revolution in Comparative Perspective

Dissertation in Geschichte

Mentoring Team:
First supervisor: Prof. Dr. Andreas Etges
Second supervisor: Prof. Irwin Collier PhD
Third supervisor: Prof. Dr. Paul Nolte

In this study I seek to answer the questions whether the “Second New Deal” and the
“Reagan Revolution” can be interpreted as paradigm shifts, and which factors were decisive
in bringing them about. Three eras of policy making in the twentieth century under the
auspices of “Classical Liberalism,” “New Deal Liberalism,” and “Neoliberalism,” were
separated by two key periods of economic reforms in 1934/35 (“Second New Deal”) and
1980/81 (“Reagan Revolution”). I examine these timespans’ political processes in a
comparative perspective in order to elucidate, by identifying parallels, the scope of and
driving forces behind these probable paradigm shifts.

Against the backdrop of protracted economic crises, the elections of 1934 and 1980
boiled down to paradigm choice through electoral competition. Despite decisive victories of
the proponents of policy shifts, however, Presidents Roosevelt and Reagan obtained only
qualified mandates for the expansion of government intervention in economic affairs and its
rollback, respectively. This was due to the heterogeneity of their electoral coalitions.

Politically moderate advisers prevailed over the ideologues in the administrations’
internecine power struggles. The formers’ preference for more modest policy changes
combined with the resilience of chief tenets of the old paradigms among congressional
opposition, intra-party critics and public opinion, and scaled back the administrations’
ideological zeal. The two presidents, on the other hand, were drivers of paradigm shifts, along
with the economic crises and qualified mandates for change. Due to these countervailing
pressures, both presidents contented themselves with an array of surprisingly modest policy
initiatives, as long as they constituted a clear and permanent departure from previous
economic principles. The Roosevelt and Reagan administrations thus practiced a strategic
pragmatism.

In the early months of congressional consideration, the presidents defended their
policy proposals through further concessions and, simultaneously, the enforcement of red
lines. The preservation of a solid groundwork prevented substantial dilution of the legislative
programs: first, both administrations succeeded at balancing the disparate interests of their
electoral coalitions’ constituencies. Second, Roosevelt and Reagan used political
communication to sell their programs as pragmatic adjustments in line with long-standing
American values. Especially the successful embrace of the “forgotten man” permitted the two
administrations to temporarily accede to the commanding heights of economic policy discourse. Therefore, third, and against the backdrop of historically relatively low levels of
party polarization, the conditions to forge congressional and sometimes bipartisan coalitions
in favor of policy shifts were bright.

As paradigm shifts, the “Second New Deal” and the “Reagan Revolution” amounted
to a series of permanent – if in themselves modest – reforms that represented pivots rather
than sharp breaks. They initiated long-term, self-propelling changes in the way economic
policy was made. This also filled out the qualified mandates of the American voters, who
never approved of a comprehensive break with the old paradigms. Even in the event of
exceptionally favorable preconditions for a fundamental overhaul of the economic policy
framework, the U.S. political system thus precluded revolutionary change. Politics,
characterized by countless access points for the opponents of change, also delineated the
scope of the new paradigms.