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What Factors Led to President Hoover’s Failure as a Visionary and a Leader?
What leadership lessons can we learn from Herbert Hoover’s flaws as president?
Herbert Hoover is widely considered to be a below average president, if not a failure. The Stock Market Crash of 1929 and the subsequent economic crisis happened on his watch. Moreover, he was the U.S. Secretary of Commerce in both the Harding and Coolidge administrations, a role in which he worked hard to promote partnerships between business and government, but ended up creating […] dubious relationships, undermining essential safeguards and slashing regulations and tax revenues, allowing the formation of complex pyramid structures which exacerbated the Great Crash and helped to spawn the Great Depression. Millions of Americans lost their life savings under his leadership.
Though we might also critique a fair number of Franklin D. Roosevelt’s New Deal policies, Hoover continues to suffer a much more withering attack as a failed leader. As head of the Executive, Hoover’s actions to reverse the economic downturn were significantly limited by his lack of vision, by his narrow conception of leadership and by his constricted view of appropriate presidential power and responsibility in economic affairs. Senator Robert F. Wagner claimed that Hoover was clinging to an old, failed policy of “do nothing and when pressure becomes irresistible do as little as possible.”1 Ultimately, assuming a laissez faire leadership style, Herbert Hoover failed to offer the creative proposals and action necessary to bring America away from the brink of the economic abyss.
Many leaders fail because of flawed or incomplete paradigms and ideologies. Hoover was no exception. While it is clear that he lacked the bold vision and moral imagination to see his way to taking any significant action beyond relying on private enterprise, what might be less obvious is the worldview operating behind his lack of vision and effort. Hoover held strong, admirable convictions about individual responsibility and self-reliance. In his simplicity, however, he was incapable of taking a broader systems view of the crisis. Instead, Hoover became a victim of his own socio-economic ideology; suffering under the illusion that the “invisible hand” could exercise leadership on his behalf. Believing in free-market capitalism is one thing, believing in laissez-faire leadership—particularly in the midst of a global economic crisis—is nothing, as Jeremy Bentham might say, but nonsense on stilts.
Adam Smith himself, the father of modern economics and the man who coined the term the “invisible hand of the market” suffered under no such illusions. Though there is little question that Adam Smith was principally in favor of free markets and that he advocated a policy of restraint in regards to state intervention, a close reading of Smith reveals him to be, in the words of one London economist, not near the “extreme dogmatic defender of laissez-faire capitalism and supply-side economics” that some libertarian extremists might like people to think.2
With a predominant focus on the freedom, liberty and happiness of the people,3 Smith wrote of the vital role he saw for the ruling political leaders, including various means of protection, creation and stimulation.4 The celebrated author of The Wealth of Nations (1776), Adam Smith believed it was necessary for the state, through general taxation, to enforce contracts, protect patents and copyrights, prevent unfair competition, thwart tariffs on trade, prevent monopolies, encourage inventions, and provide for public goods such as roads, bridges, lighthouses, public safety, security and national defense—to name but a few.
The idea that capitalism can operate effectively without rational safeguards and reasonable state intervention is as absurd, deeply flawed and extreme as the idea that socialism can ensure the equitable and efficient distribution of prosperity. Nevertheless, Americans’ love of freedom, suspicion of government, and voracious hunger for financial success leaves us far more vulnerable to the extremes of capitalism than the obvious limits and debilitating weaknesses of socialism. Indeed, excessive faith in pure, unbridled capitalism and laissez faire leadership did not end with the failures of Herbert Hoover.
It was a fate that even Alan Greenspan, the (formerly) esteemed Chairman of the Federal Reserve (1987-2006), would suffer—perhaps until the 2008 financial crisis. Testifying before the U.S. Congress, acknowledging that his long cherished economic ideology was flawed, Greenspan confessed to being “in a state of shocked disbelief.”5 “A humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.”6 Representative Henry Waxman, Chairman of the House Committee on Oversight and Government Reform, asked: “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”7 Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”8 Though Greenspan was not willing to accept blame, he did acknowledge that “his belief in deregulation had been shaken.”9Andrews A long-time protégé and associate of Ayn Rand, with her extreme ideology of “rational selfishness,” which continues to hold great sway over the U.S. economy; Greenspan’s worldview came crashing down. In his own words: “The whole intellectual edifice…collapsed in the summer of last year.”10
Although adopting an unchecked view of laissez faire capitalism seriously undermined Hoover’s ability and willingness to respond to the economic depression and, ultimately, helped to destroy his reputation as President; the leadership lesson we can learn from his failure has less to do with any one particular political or economic ideology. The key is in acknowledging the limits of any single position, recognizing the blind spots of any one specific point of view.
Ideology can be a constricting force on vision. Fostering creative solutions to difficult problems requires examining assumptions and questioning limiting beliefs, looking beyond the boundaries of our mental models and political paradigms to see alternative ways of framing problems and new, creative ways of fostering solutions.
Ideology works against these aims, often in deceptively powerful ways. Michael Freeden, Director of the Centre for Political Ideologies at Oxford, describes ideology as an organizing framework, a way of making sense and assigning meaning to what otherwise might be seen as chaotic and random political events.11 Ideologies serve as maps of the political and social world, which do not, of course, represent objective reality.12 The HarperCollins Dictionary of American Government and Politics (1993) defines ideology as “an interrelated set of ideas or a world view that explains complex social phenomena in a relatively simple way; the selected and often distorted notions about how society operates.”13 As such, ideologies both greatly influence and severely constrain our thinking. Ideologies work by imposing patterns, “some form of structure or organization—on how we read (and misread) political facts, events, occurrences, actions, on how we see images and hear voices.”14
However widespread or even unavoidable ideologies may be, it is wise to be mindful of the inherent limitations of viewing the world through a single lens. President John Adams, believing that ideology leads to barbarism and excess, wrote, “that the “proper definition” of ideology “is the science of Idiocy. And a very profound, abstruse, and mysterious science it is…taught in the school of folly.”15
There are numerous leadership lessons that we can learn from both the failures of Herbert Hoover and the successes of FDR. The influence of ideology over Franklin D. Roosevelt—and his vision and approach to leadership—stands in stark contrast. It allowed him not only to succeed where Hoover failed, it allowed him to emerge as a great American hero.
Application and Exploration
- How do you understand the concept of ideology and what influence do you see it having over the thoughts and actions of Americans?
- Do you think it is possible to operate in the political sphere without an ideology or is it inherent in the way we think?
- What strategies and tactics can we adopt to avoid being limited by our political ideologies? And what risks might there be in this?
Notes and Bibliography
- Rauchway, Eric (2008). The Great Depression and the New Deal: A Very Short Introduction (Very Short Introductions). New York: Oxford. Pg. 23.
- Brown, Vivienne (1993). Book Review: Capitalism as a Moral System: Adam Smith's Critique of the Free Market Economy by Spencer J. Pack. The Economic Journal, Vol. 103, No. 416. January 1993. Pgs. 230.232.
- Strauss, Leo & Cropsey, Joseph (Eds.). (1987). History of Political Philosophy (Third Edition). Chicago: University of Chicago Press. Pg. 642.
- Ibid. Pg. 641.
- Andrews, Edmund L. (2008). "Greenspan Concedes Error on Regulation." The New York Times. October 23, 2008.
- Ibid. 1
- Ibid. 2
- Ibid. 3
- Ibid. 4
- Ibid. 5
- Freeden, Michael (2003). Ideology: A Very Short Introduction. New York: Oxford University Press. Pg. Jacket Cover.
- Freeden, Michael (2003). Ideology: A Very Short Introduction. New York: Oxford University Press. Pg. 2-3.
- Dean, John W. (2006). Conservatives Without Conscience. New York: Penguin Group. Pg. 5.
- Freeden, Michael (2003). Ideology: A Very Short Introduction. New York: Oxford University Press. Pg. 3.
- Dean, John W. (2006). Conservatives Without Conscience. New York: Penguin Group. Pg. 5.
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