The New Deal saw a number of monumental pieces of legislation. Many of these, such as the 1933 Banking Act that created the FDIC, form the basis of major economic institutions still to this day. One piece of legislation that seems to have left no remnants is the National Industrial Recovery Act (NIRA). Yet if you had asked FDR and many of his advisers at the time which piece of legislation was most central to the New Deal program and which would have the longest lasting effects, they would have pointed to the NIRA. The law was truly remarkable in the scale and scope of changes it envisioned for the American economy.

So why has the NIRA ended up as something of an interesting historical footnote? There is, of course, the obvious reason in the form of the famous Schechter decision in 1935 striking down the legislation as unconstitutional. However, this legal ruling is not a totally satisfying answer given the sharp shift in the Supreme Court’s sentiment. Following White Monday, why didn’t FDR simply push Congress to pass a slightly revised version of the NIRA that addressed the Constitutional concerns brought up by the Court?

This, in my view, is where Jason Taylor’s book Deconstructing the Monolith starts. To understand why the law disappeared requires understanding what the effects of the law were for the short period while it was in place. Some (see, e.g., Hal Cole and Lee Ohanian “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis.” Journal of Political Economy 112 [2004]: 779-816 or G. Eggertsson “Was the New Deal Contractionary?” American Economic Review 104 [2012]: 524-55.) have attempted to address this question by focusing on macro effects. As Taylor rightfully points out, this seems to be putting the cart before the horse. We first need to understand the effects of the law at the level of worker, establishment, and industry before trying to put it altogether.

Once we turn our sights to the micro-level, it becomes clearer why this law never came back. It wasn’t that it was an outright “failure,” and it surely wasn’t the case that the law was “too successful.” Instead what we learn from Taylor’s book is, in some sense, obvious ex post: effects of this massively complex law were different for different industries, different establishments, and different workers. The law was in fact a number of distinct pieces of legislation rolled into one. So while the NIRA was never to be seen again in its earlier form, particular provisions of the NIRA were brought back in different pieces of legislation like the right of workers to collectively bargain in the National Labor Relations Act of 1935. The answer then to the motivating question is that just like it is a mistake to treat the effects of the NIRA as some unidimensional variable, it is a mistake to think of the NIRA as simply no more after Schechter. Its effects live on in numerous other pieces of legislation that are still with us.

Taylor draws on mainly industry level data to provide support for this claim that heterogeneity was the defining feature of the NIRA. He complements quantitative analysis of these data with a myriad of primary sources. In some cases, this adds up to a compelling case. In others, this reviewer was left less than totally convinced.

The book is filled with lots of great detail from primary sources on how policies were formulated and the administrative apparatus was thrown together to implement them. The chapter on the President’s Reemployment Agreement (PRA) is a particularly good example of this. To support what was a voluntary agreement, the Roosevelt Administration created an incredibly effective advertising campaign to promote participation on the part of the businesses and consumers. Businesses were able to display the “Blue Eagle” emblem on their products and consumers were encouraged to only patronize these businesses. The Boy Scouts even got involved and in Detroit, the local recovery committee threw a parade that attracted 15,000 people!

While Taylor provides a fair amount of quantitative evidence establishing wide participation, the quantitative evidence on its economic effects are much harder to nail down. These few months in the spring and summer of 1933 are some of the most incredible in all of American economic history with industrial production increasing by over 50%. Even in the best case, it is hard to convince cranky economists that you are identifying the effects of a certain policy using time series regressions. Given these challenges and lacking some clever identification strategy, the remaining way to build the case is to provide qualitative data and anecdotes showing how economic behavior did change. If actually adopted, the minimum wage and maximum workweek provisions should have required major adjustments on the part of firms. So how exactly did they adjust to the limits on the length of the workweek? How did they adjust pay scales given the PRA also forbade reducing compensation for those making above the minimum? Even just a few anecdotes on actual firm behavior would go a long way.

This book should be of interest to specialists in American economic history and particularly those interested in the Great Depression. It could (should?) have some broader appeal to economists interested in industrial organization, regulation, and perhaps even labor. To be honest, economists who have worked on the NIRA in the past and more recently have not done as good as job as possible in reaching out to this larger audience. I do hope that this book is a start.