Unlike farmers, industrialists cut production with the onset of the depression. Between 1929 and 1933, industrial production fell more than 40 percent in an effort to balance low demand with low supply and thereby maintain prices. But falling industrial production meant that millions of working people lost their jobs. Unlike farmers, most working people needed jobs to eat. Mass unemployment also reduced consumer demand for industrial products, contributing to a downward spiral in both production and jobs, with no end in sight. Industries responded by reducing wages for employees who still had jobs, further reducing demand—a trend made worse by competition among industrial producers. New Dealers struggled to find a way to break this cycle of unemployment and underconsumption—a way consistent with corporate profits and capitalism.

The New Deal’s National Industrial Recovery Act opted for a government-sponsored form of industrial self-government through the National Recovery Administration (NRA), established in June 1933. The NRA encouraged industrialists to agree on rules, known as “codes,” to define fair working conditions, to set prices, and to minimize competition. The idea behind codes was to stabilize existing industries and maintain their workforces. Industry after industry wrote elaborate codes addressing detailed features of production, pricing, and competition. In exchange for the relaxation of federal antitrust regulations that prohibited such business agreements, the participating businesses promised to recognize the right of working people to organize and engage in collective bargaining. To encourage consumers to patronize businesses with NRA codes, posters with the NRA’s Blue Eagle appeared in shop windows throughout the nation.

New Dealers hoped that NRA codes would yield businesses with a social conscience, ensuring fair treatment of workers and consumers as well as promotion of the general economic welfare. Instead, NRA codes tended to strengthen conventional business practices. Large corporations wrote codes that served primarily their own interests rather than the needs of workers or the welfare of the national economy. The failure of codes to cover domestic workers or agricultural laborers led one woman to complain to Roosevelt that the NRA “never mentioned the robbery of the Housewives” by the privations caused by the depression.

Many business leaders criticized NRA codes as heavy-handed government regulation of private enterprise. In reality, compliance with NRA codes was voluntary, and government enforcement efforts were weak to nonexistent. The NRA did little to reduce unemployment, raise consumption, or relieve the depression. In effect, it represented a peace offering to business leaders by Roosevelt and his advisers, conveying the message that the New Deal did not intend to wage war against profits or private enterprise. The peace offering failed, however. Most corporate leaders became bitter opponents of Roosevelt and the New Deal.