Remember last year’s blogosphere debate on whether FDR was an “American Mugabe”? I just came across a 1997 piece by Robert Higgs that I should have been quoting in my defense. But late is better than never. His thesis:

In retrospect it seems hyperbolic to put much weight on the fears of investors in the latter half of the 1930s that the regime might soon undergo changes that would seriously jeopardize their private property rights—after all, we know quite well that the U.S. economy
did not fall into outright fascism, socialism, or some other variant of government takeover. Roosevelt, we now know, never became a dictator along the lines of his contemporaries Stalin, Mussolini, and Hitler; the New Dealers were no Brown Shirts. But what seems so obvious to us in retrospect had a quite different appearance to many contemporaries… As I shall demonstrate shortly, the possibility that the United States might undergo an extreme regime shift seemed to many investors in the late 1930s and early 1940s not only possible but likely.

Higgs presents a lot of evidence, but here’s the clincher:

In November 1941, just before the Japanese attack on Pearl Harbor propelled the United States into total war, the Fortune pollsters asked a sample of business executives a question that bears quite directly on the regime uncertainty at issue in this article. The question was “Which of the following comes closest to being your prediction of the kind of economic structure with which this country will emerge after the war?” The respondents were presented with four options, as follows (the percentage of respondents selecting that option as the closest to their own prediction is shown in brackets):

(1) A system of free enterprise restored very much along the prewar lines, with modifications to take care of conditions then current. [7.2 percent]

(2) An economic system in which government will take over many public services formerly under private management but still leave many opportunities for private enterprise. [52.4 percent]

(3) A semi-socialized society in which there will be very little room for the profit system to operate. [36.7 percent]

(4) A complete economic dictatorship along fascist or communist lines. [3.7 percent] (Cantril 1951, 175)

…If these poll data are even approximately indicative of the true expectations of American investors, then it is astonishing that the recovery of investment had proceeded as far as it had.

HT: Cafe Hayek