Front Page Titles (by Subject) Herbert Hoover & Federal Welfare - Literature of Liberty, Autumn 1981, vol. 4, No. 3
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Herbert Hoover & Federal Welfare - Leonard P. Liggio, Literature of Liberty, Autumn 1981, vol. 4, No. 3 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Herbert Hoover & Federal Welfare
“Bureaucrats as 'social Engineers': Federal Welfare Programs in Herbert Hoover's America.” American Journal of Economics and Sociology 39(October 1980): 321–335.
Herbert Hoover's career in the 1920s exemplified the cooperative aspects of federal welfare efforts during that period. Paradoxically, Hoover saw himself as both a “planner” and as an anti-statist. He believed that the federal government should “serve as a midwife to a new, nonstatist commonwealth” composed of private interest groups. The private parties involved in the process (corporations, trade associations, etc.) would create new organizations and techniques to spread enlightened ideas. The “socially responsible” standards they developed would serve as the key element in defining an American social welfare system.
The federal welfare structure of the 1920s rested upon three basic programs: vocational education, vocational rehabilitation, and infant/maternal hygiene. The American military mobilization in World War I gave impetus to the first two programs, because the nation required an effectively trained work force to wage the war. The growing political power of women in the early 1920s helped to promote the third.
The three welfare programs undertaken by federal administrators were all modest in scope. In 1924, for example, four physicians, a nurse, an accountant, a secretary, and a stenographer composed the entire staff of the Washington office for the infant and maternal health program. As late as 1928, 96 percent of total federal welfare expenditures went to war veterans.
Barriers to the expansion of direct federal welfare activities were strong. All the welfare programs created during the 1920s operated on the principle of federal grants-in-aid to the states. Each program involved state provision of services to welfare recipients. Such people received advice or training from a professional counsellor or teacher, not money from the federal government.
An even more important barrier to federal welfare expansion was the struggle to meet the decade's standard of efficiency. The well-run public program was supposed to resemble the well-conducted business. It was to perform its operations at the least possible cost and create products which society valued. The desire for program efficiency through business-like administration was the characteristic which most clearly defined the 1920s style of public welfare.
In the vocational education and rehabilitation programs, the drive to get the greatest return for the dollar led to a policy of preferential treatment for those most likely to find a place in the work force. As a result, women, blacks, and the severely injured often did not receive assistance from welfare officials, since these categories of clients would encounter significant obstacles to finding jobs.
The efficiency standard was in large part responsible for the fact that, of the 207 people who managed to see the State of Georgia's two rehabilitation counsellors in fiscal 1921, only 12 received some form of vocational training.
Despite such statistics, the efficiency standard could make the rehabilitation programs seem like a smashing success. Government statisticians, for example, had calculated that in 20 years, those helped by rehabilitation programs would collectively earn $147,004,000. In order to generate that impressive sum, federal and state governments had spent only $1,124,500. Thus, the nation would have reaped returns of over 10,000 percent on investment—impressive even by 1920s standards.
The Great Depression wiped out the ideological rationale for the social welfare system of the 1920s. By 1937, New Deal officials had created a distinctively public approach to social welfare problems, and regarded themselves as administrators of welfare programs which provided federal services directly to the people. After 1937, federal bureaucrats would no longer confine themselves to providing demonstration projects to interested observers in corporations, trade associations, localities, and states. They would, with increasing success, create a world of their own. In this world, equation of welfare and efficiency occupied but a modest place.