Propertarian
Chieftain
- Joined
- May 27, 2007
- Messages
- 23
I know the traditional Keynesian theory is that the Great Depression happened because Herbert Hoover was a believer in laissez-faire. People underconsumed, causing a Depression and the Federal Reserve did the wrong thing by deflating instead of inflating. Then FDR came along and saved the day with the New Deal. Neo-Conservatives historians tend to mostly agree with the standard liberal account, but they believe that the New Deal didn't work and that World War II ended the Depression.
However, I don't believe in this account, as it doesn't make alot of sense when you look at the historical record. Hoover was not a believer in laissez-faire and spent his time that he campaigned in 1932 telling people that he didn't listen to the "reactionary" economists. The businesses that went broke at the beginning of the Depression were not consumer goods businesses, but rather business-to-business companies. When you look at the record of the New Deal, it didn't do anything to actually stop the Depression and actually prolonged it. World War II had nothing to do with it either as things weren't much better immediately after World War II.
I personally think the post-war recovery (which actually surprised every mainstream analyst at the time, as they all thought that Communism was the wave of the future and far more efficient) was actually due to the 80th Congress, which was the first Congressional term in which the anti-New Deal Old Right got a majority. The 80th Congress filibustered the "Fair" Deal, which included the first Socialized Medicine proposal in American history and prevented it from passing. They also repealed price controls and passed legislation to put stricter limits on the activities of trade unions. Had Eisenhower decided to run as a Democrat in 1952, rather than a Republican, the Old Right would have won the presidency and repealed the entirety of the New Deal and probably restored the laissez-faire Capitalism of the 1800s. They would definitely have cut off Social Security, as the Old Right at that time consisted of most of the Senior citizens and they absolutely hated that now-beloved entitlement program.
I probably agree most with Murray Rothbard about the Depression. He wrote a book about its causes in the 60s, which was mostly ignored at the time.
However, I don't believe in this account, as it doesn't make alot of sense when you look at the historical record. Hoover was not a believer in laissez-faire and spent his time that he campaigned in 1932 telling people that he didn't listen to the "reactionary" economists. The businesses that went broke at the beginning of the Depression were not consumer goods businesses, but rather business-to-business companies. When you look at the record of the New Deal, it didn't do anything to actually stop the Depression and actually prolonged it. World War II had nothing to do with it either as things weren't much better immediately after World War II.
I personally think the post-war recovery (which actually surprised every mainstream analyst at the time, as they all thought that Communism was the wave of the future and far more efficient) was actually due to the 80th Congress, which was the first Congressional term in which the anti-New Deal Old Right got a majority. The 80th Congress filibustered the "Fair" Deal, which included the first Socialized Medicine proposal in American history and prevented it from passing. They also repealed price controls and passed legislation to put stricter limits on the activities of trade unions. Had Eisenhower decided to run as a Democrat in 1952, rather than a Republican, the Old Right would have won the presidency and repealed the entirety of the New Deal and probably restored the laissez-faire Capitalism of the 1800s. They would definitely have cut off Social Security, as the Old Right at that time consisted of most of the Senior citizens and they absolutely hated that now-beloved entitlement program.
I probably agree most with Murray Rothbard about the Depression. He wrote a book about its causes in the 60s, which was mostly ignored at the time.