BOOK REVIEW - The Forgotten Man A New History of the Great Depression By Amity Shlaes: The contention that Roosevelt's 'New Deal' policies only served to worsen, rather than alleviate, the effects of the Great Depression is not a new argument, writes Conor O'Clery

On April 7th, 1932, as the Great Depression deepened, Franklin D Roosevelt, remarked: "These unhappy times call for the building of plans . . . that put their faith once more in the forgotten man at the bottom of the economic pyramid."

Three months later, on July 2nd, 1932, as he accepted the Democratic nomination for president, Roosevelt pledged "a New Deal for the American people", but specifically for "the forgotten, the unorganised but the indispensable units of economic power".

Roosevelt's New Deal aimed to bring about economic recovery, financial reform and relief for the people whose lives had been devastated. Since the crash of 1929, construction work and manufacturing had plunged, wages declined and farms went bankrupt. Unemployment had risen from 4 per cent to 25 per cent.

Our impression of the forgotten man is the dirt-poor share-cropper of John Steinbeck's The Grapes of Wrath and the gaunt figure lining up at soup kitchens in black-and-white photographs of 1930s New York.

The forgotten woman would be the "Migrant Mother" of Dorothea Lange's famous photograph.

Amity Shlaes argues that the real forgotten man of the Great Depression is similar to the one defined by Yale philosopher Graham Sumner half a century earlier: the person who is coerced through dubious laws to pay for the less fortunate, more specifically in her view that the small businessman trying to survive without the help of the government.

This is not a new argument - it was debated throughout the Depression and embraced by the right. Neither is the author's contention new that the New Deal policies only worsened the situation in the United States.

Just over half of economic historians and economists surveyed in 1955 agreed that government policies of the New Deal served to lengthen and deepen the Great Depression.

Nevertheless, this hefty tome is a major contribution to the conservative argument against big government and a challenge to the liberal view of the Roosevelt era.

To make her point, Shlaes devotes a chapter to the case of ALA Schechter Poultry Corp v United States, the landmark 1935 legal episode that undid a central element of the New Deal - the right to intervene in business granted to the National Recovery Administration (NRA), which had the goal of driving prices up and putting people back to work.

The Schechter brothers were Brooklyn chicken butchers who were charged with the sale to a butcher of an unfit chicken and the sale of two uninspected chickens. They challenged the regulation of the poultry industry under the NRA.

The Supreme Court in the US ruled that they did not engage in interstate commerce, thereby rejecting the authority of the federal NRA. As a result of the ruling, some 500 cases against people charged with breaking NRA codes were dropped.

Shlaes, a syndicated columnist at Bloomberg, argues that both Roosevelt, who was US president from 1933 to 1945, and his predecessor, Herbert Hoover, failed to understand the prosperity of the 1920s. She also argues that, as the economy collapsed, Roosevelt heaped massive burdens on the country that offset the benefits of the New Deal programmes.

Some of Roosevelt's programmes survived, despite a largely successful conservative push back, such as federal protection of bank deposits and the Securities and Exchange Commission (SEC) that today regulates the stock market.

One of his most important legacies is the social security system in the US, which provides unemployment insurance, health insurance for the aged and disabled (Medicare), and state medical grants (Medicaid).

Some voices on the far right in the US have called for the system to be scraped. This is unlikely, but there are genuine concerns that it is heading for bankruptcy.

As Shlaes relates in her academic study - told in episodes rather than chronologically - some of the ideas embraced by promoters of the New Deal were inspired by experiments in Soviet Russia and in fascist Italy. This tainted them in the eyes of both Republicans and Democrats.

This helps explain the great failure of the modern United States: its inability to adopt a healthcare system that would require Shlaes's "forgotten man" - the taxpayer who is the mainstay of healthcare in many European democracies - to give a helping hand to the 40 million or so Americans who live in terror of getting sick.

• Conor O'Clery is the former Washington correspondent forThe Irish Times . His biography of American philanthropist Chuck Feeney, founder of Atlantic Philanthropies, will be published in the autumn