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Send email to admin eh. While this characterization may be true in broad outline, close examination of the NRA reveals that matters may be somewhat more complicated than is suggested by the interpretation of the program as a win for labor contrasted with a missed opportunity for business.
Meanwhile, macroeconomists have suggested that the Act and its progeny, especially labor measures such as the National Labor Relations Act may bear more responsibility for the length and severity of the Great Depression than has been recognized heretofore. Some 16 million workers were covered, out of a non-farm labor force of some 25 million.
The NIRA provided that: Arguments about exactly what the NIRA allowed, and how the NRA should implement the Act began during its drafting and continued unabated throughout its life.
The arguments extended from the level of general principles to the smallest details of policy, unsurprising given the complete dependence of appropriate regulatory design on precise regulatory objectives, which here were embroiled in dispute from start to finish.
To choose just one out of many examples of such disputes: That is, they wished to develop and allow the use of mechanisms that would extend to more fragmented industries a type of peaceful coexistence more commonly associated with oligopoly.
At the same time that some officials of the NRA arguably took actions to promote softened competition, some in industry tried to implement measures more likely to support hard-core cartels, even when they thereby reduced the chance of soft competition should collusion fail.
For example, with the partial support of the NRA, many code authorities moved to standardize products, shutting off product differentiation as an arena of potential rivalry, in spite of its role as one of the strongest mechanisms that might soften price competition.
An industry push for standardization can thus be seen as a way of supporting hard-core cartelization, while less enthusiasm on the part of some administration officials may have reflected an understanding, however intuitive, that socially more desirable soft competition required that avenues for product differentiation be left open.
Thus although its conclusions are interesting as a matter of political economy, it is far from clear that the Board carried out any dispassionate inventory of conditions across industries, much less a real weighing of evidence. Firms that attempted to uphold code prices in the face of defection lost both market share and respect for the NRA.
NRA hesitancy came about as a result of doubts about whether a vigorous enforcement effort would withstand constitutional challenge, a not-unrelated lack of support from the Department of Justice, public antipathy for enforcement actions aimed at forcing sellers to charge higher prices, and unabating internal NRA disputes about the advisability of the price-fixing core of the trade practice program.
By that point then, contrary to the initial expectations of many code signatories, the new antitrust regime represented only permission to form voluntary cartelization agreements, not the advent of government-enforced cartels.
Even there, participants had to be discreet, so as not to run afoul of the antimonopoly language of the Act. Of course, modern observers of the alternating successes and failures of cartels such as OPEC will not be surprised that the NRA program led to mixed results. In the absence of government enforcement, the program simply amounted to de facto legalization of self-enforcing cartels.
With respect to the ease of collusion, economic theory is clear only on the point that self-enforceability is an open question; self-interest may lead to either breakdown of agreements or success at sustaining them. Any organization violating … shall cease to be entitled to the benefits of this title.
The concern for small enterprise had strong progressive roots. In addition to evaluating monopolization under the codes, the Darrow board had been charged with assessing the impact of the NRA on small business.
In the absence of effective enforcement from the government, such prices were doomed to break down, triggering repeated price wars in some industries. Undoubtedly, the bitterness was exacerbated by the fact that the NRA wanted higher wages while failing to deliver the tools needed for effective cartelization.
However, it is not entirely clear that everyone in the business community felt that the labor provisions of the Act were undesirable. Many proponents of the NIRA held that competitive pressures on business had led to downward pressure on wages, which in turn caused low consumption, leading to greater pressure on business, and so on.
Allowing workers to organize and bargain collectively, while their employers pledged to one another not to sell below cost, was identified as a way to arrest harmful deflationary forces. Thus the rationale for NRA wage supports at the microeconomic level potentially dovetailed with the macroeconomic theory by which higher wages were held to support higher consumption and, in turn, higher prices.
The NRA is generally judged to have been a success for labor and a miserable failure for business.
However, evaluation is complicated to the extent that labor could not have achieved gains with respect to collective bargaining rights over wages and working conditions, had those rights not been more or less willingly granted by employers operating under the belief that stabilization of labor costs would facilitate cartelization.
The labor provisions may have indeed helped some industries as well as helping workers, and for firms in such industries, the NRA cannot have been judged a failure. Moreover, while some businesses may have found the Act beneficial, because labor cost stability or freedom to negotiate with rivals enhanced their ability to cooperate on price, it is not entirely obvious that workers as a class gained as much as is sometimes contended.
The NRA did help solidify new and important norms regarding child labor, maximum hours, and other conditions of employment; it will never be known if the same progress could have been made had not industry been more or less hornswoggled into giving ground, using the antitrust laws as bait.
Whatever the long-term effects of the NRA on worker welfare, the short-term gains for labor associated with higher wages were questionable. While those workers who managed to stay employed throughout the nineteen thirties benefited from higher wages, to the extent that workers were also consumers, and often unemployed consumers at that, or even potential entrepreneurs, they may have been better off without the NRA.
The issue is far from settled. Probably more important, though, is the observation that with imperfectly competitive product markets, output depends on aggregate demand as well as the real wage. Maybe Herbert Hoover and Henry Ford were right: Higher real wages may have paid for themselves in the broader sense that their positive effect on aggregate demand compensated for their tendency to raise cost.Overview of the United States National Recovery Administration () and an inventory of Library of Congress holdings of selected documents published by the Administration.
Business Reference Services. Science, Technology, and Business Division. Library of Congress. Learn about the many topics that highlight SAMHSA’s efforts to prevent and reduce the impact of mental illness and substance use in America’s communities. National Recovery Administration (NRA), U.S.
government agency established by President Franklin D. Roosevelt to stimulate business recovery through fair-practice codes during the Great Depression.
Chapter 17 and 18 Test Review Answers Multiple Choice and Completion 1. The Supreme Court declared the National Recovery Administration unconstitutional. True Essay 1.
Then write an essay describing how it initially worked, who benefited, and who did not. Later the National Labor Relations Board and the Rural Electrification Administration were passed by the Congress in order to replace the labor portions of the NRA, but Congress did not bring back the industrial code system.
National Recovery Administration; National Recovery Administration. 8 August any time,” was said by C. 🙂 Calvin Coolidge on calling out the Massachusetts National Guard during the Boston police strike The Republican administrations of the s would best be described as B.
ESSAY SAMPLE written strictly according to your.