The crash of the stock market brought many hard times.

Franklin D. Roosevelt’s New Deal was a way to fix these
times. John Stuart Mill and John Maynard Keynes were two
economists whose economic theories greatly influenced and
helped Franklin D. Roosevelt devise a plan to rescue the
United States from the Great Depression it had fallen into.

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John Stuart Mill was a strong believer of expanded
government, which the New Deal provided. John Maynard
Keynes believed in supply and demand, which the New
Deal used to stabilize the economy. Franklin D. Roosevelt’s
New Deal is the plan that brought the U.S. out of the Great
Depression. It was sometimes thought to be an improvised
plan, but was actually very thought out. Roosevelt was not
afraid to involve the central government in addressing the
economic problem. The basic plan was to stimulate the
economy by creating jobs. First Roosevelt tried to help the
economy with the National Recovery Administration. The
NRA spread work and reduced unfair competitive practices
by cooperation in industry. Eventually the NRA was
declared unconstitutional. Franklin D. Roosevelt then needed
a new plan. Keeping the same idea of creating jobs he made
many other organizations devoted to forming jobs and in turn
helping the economy. One of those organizations was the
Civilian Conservation Corps. This corps took men off the
streets and paid them to plant forests and drain swamps.

Another of these organizations was the Public Works
Administration. This organization employed men to build
highways and public buildings. These were only some of the
organizations dedicated to creating jobs. Creating jobs was
important because it put money in the hands of the
consumer. This directly affected the supply and demand. The
more money they had the more they could spend. This
would slowly start a chain reaction and bring the economy
back to the way it was before the depression. By the end of
the 1930’s this plan had lowered unemployment to 17.2%.

To make these organizations it was going to take money.

Roosevelt had to deficit spend, which is when the
government spends more than their budget in one year, in
order to obtain this money. Of course these ideas of supply
and demand and active government didn’t just come to him.

He was influenced by John Maynard Keynes and John
Stuart Mill. There philosophies were the basis of the New
Deal. John Stuart Mill, who began studying economics at
age 13, was one of the most influential political thinkers of
the mid-Victorian period. He believed in empiricism and
utilitarianism. Empiricism is the belief that legitimate
knowledge comes only from experience. Utilitarianism is the
belief by which things are judged right or wrong. It is judged
according to their consequences. In a way he was a
hypocrite. When the economy was good he believed in
Laisezz-Faire, which means “hands off.” If the economy was
bad, though, he believed in an extended role of government.

This simply meant that the government should take part in
the economy and try to make it better. The New Deal was a
very active government plan because it had the government
working directly to make jobs and fix the economy. Mill
died in 1873 and would never had a chance to talk to
Franklin D. Roosevelt. In a press conference Franklin D.

Roosevelt once said, “I brought down several books by
English economists and leading American economists, I
suppose I must have read different articles by fifteen different
experts.”(Schlesinger, Pg.650) This writing indirectly steered
Roosevelt towards a plan which expanded the role of
government. Mill gave Franklin D. Roosevelt the basis of the
plan, but it needed to be elaborated on. John Maynard
Keynes was the man to do this. John Maynard Keynes, one
of the most influential economists of the 20th century. For
many years he was an active voice in economics. In 1929 he
wrote We Can Conquer Unemployment and in 1930 he
wrote his Treatise on Money. Ten years before he died he
wrote his General Theory of Employment, Interest and
Money. Above all he believed in supply and demand. This
was an indirect way to let the economy balance itself. In
order for this system to work people needed money. This
could only be done by creating jobs. Keynes also believed
that to reduce unemployment the government needed to
increase the aggregate demand. The aggregate demand is the
total amount of goods being demanded. The government
could do this by creating jobs. These jobs would provide
people with money to spend on products. The ability to pay
and the increase desire to spend would increase the demand
for goods. The demand for goods would rise and the
demand for workers would rise. This would slowly reduce
the unemployment rate and put the economy back where it
was before the crash of the stock market. In Arthur M.

Schlesinger Jr.’s book The Politics of Upheaval it’s stated
that Franklin D. Roosevelt and Keynes communicated on
several occasions such as, letters, English tea meetings, and
messages delivered via mutual friends. Although Franklin D.

Roosevelt never publicly embraced Keynes’ theories, and at
times voiced disagreement with parts of his theories, there
were many similarities between the works of the two men.

Franklin D. Roosevelt took these philosophies and created
the New Deal, which eventually brought the United States
out of the Great Depression. John Stuart Mill gave Franklin
D. Roosevelt the idea of an active government and John
Maynard Keynes showed him how to do it. Although
Franklin D. Roosevelt never really liked economists it
appears that the work of many economists showed up in his
New Deal. Although Mill did not directly influence FDR his
philosophies were present in Franklin D. Roosevelt’s plan.

Also, Keynes theories were disagreed on time and time
again by FDR, but in the end the New Deal was almost a
perfect example of Keynes’ theories.