People Must Live by Work. Steven Attewell

      In addition to this immediate, countercyclical recovery effect, the PWA experts hoped that public works would also advance a different kind of public intervention into the economy: long-term economic planning led by government agencies whose actions would produce new avenues for growth and smooth out the business cycle.⁴⁹ In the minds of PWA experts, public works would be both economically progressive and fiscally prudent.

      The PWA’s “National Construction Plan” exemplifies the theory. It characterizes the Great Depression as primarily a failure in the construction market: “From 1925 through 1929 total dollar volume of annual construction was within the range of $[11 billion] to $[13 billion]…. It is estimated that private construction at the present time is at the rate of $[2.5 billion] to [3 billion] a year.”⁵⁰ To reverse this trend, the PWA advocated boosting production, rather than enhancing consumer demand—“a government program of $[5 billion] a year would bring the total construction volume to the figure mentioned about as representing an adequate amount of construction to give a volume of employment equal to that prevailing from 1925–1929.”⁵¹ The emphasis here is on the material factors, the volume of construction, the works themselves, as the key factors driving the economy.

      Back to Work: The Story of the PWA, Ickes’s account of the program’s history and importance, focuses on the multiplier and transformative effects of new production relative to new consumption: “Wide highways offer possibilities of easier and more profitable trade for the farmers; higher standard of living for his family,” he noted. “Upon roads depend the prosperity of millions…. [A]t the present time the greatest potential source of national wealth lies undeveloped in our rivers…. [E]ach gallon of water falls is a possible source of electric current, which possess the god-like qualities of heat, power, and light.”⁵² Public institutions had the capacity to expand and improve the physical and moral environment of the United States. As Ickes put it, “Roads bring civilization.”

      FDR’s economic planners were all convinced that eliminating unemployment was critical. But the road to that end wound through different policies. The WPA sought to use direct job creation to lower joblessness, while the PWA thought the same thing could be done indirectly through the multiplier effect of public purchases. For the latter, public works would produce substantial numbers of government jobs (the PWA employed some 650,000 people in 1935, after all). But the real impact would come in “secondary effects” as moribund core industries fired up the plants to meet new orders and then brought back their old workers. This was the key argument of the “National Construction Program”: