Outstanding Academic Book for 2007, Choice magazine
Social Science Book of the Month, Society Magazine
"Robert Higgs is a contrarian and an iconoclast. He believes that economists and historians have misunderstood U.S. economic history during the middle decades of the 20th century." American Journal of Sociology
"Thoughtful and detailed criticism." Hugh T. Rockoff, professor of economics, Rutgers University
"Necessary correctives to the popular and scholarly willingness to remain emotionally invested in erroneous explanations." Journal of American Studies
"An important book. Those interested in the interaction between the domestic economy, war, and heavily armed peace will find it essential reading." Paul Johnson, author, Modern Times and A History of the American People
"A real eye opener and bold foray into contemporary political economy."
Richard E. Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, New York University
"Key challenges to both the macromonetary and Keynesian explanations of the American experience in the era of depression and world war." Journal of Markets & Morality
About the Author
Robert Higgs is a senior fellow in political economy at the Independent Institute and the editor of the quarterly journal Independent Review. He is the author of Against Leviathan, Neither Liberty Nor Safety, and The Resugence of the Warfare State, and has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics in Prague. He lives in Covington, Louisiana.
Dr. Robert Higgs (born 1 February 1944) is an American economic historian and an economist of the Austrian school. His writings in economics and economic history have most often focused on the causes, means, and effects of government growth. Dr. Higgs has written extensively about the ratchet effect, the economic causes of the Great Depression, regime uncertainty, and the myth that World War II caused economic recovery in the late 1940s.
Currently Dr. Higgs is Senior Fellow in Political Economy for The Independent Institute and Editor of the Institute's quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation.
Dr. Higgs is the recipient of numerous awards, including the Gary Schlarbaum Award for Lifetime Defense of Liberty, Thomas Szasz Award for Outstanding Contributions to the Cause of Civil Liberties, Lysander Spooner Award for Advancing the Literature of Liberty, Friedrich von Wieser Memorial Prize for Excellence in Economic Education, and Templeton Honor Rolls Award on Education in a Free Society.
There's a story that most Americans of my and later generations have grown up with. It goes something like this: in the late 1920's our economy spontaneously dropped off a cliff due to an (unexplained) failure of capitalism and free enterprise. Although the situation was initially made worse by the laissez faire ideology of the Hoover administration, from 1933 onward FDR boldly enacted needed government policies to compensate for the inability of free markets to generate full employment and to self-correct. Thus government "demand" substituted for the absence of private "demand" and the grave situation was ameliorated through the 1930's. Then World War II arrived and provided just the Keynesian stimulus the economy really needed to come out of the Great Depression once and for all. Prosperity returned with the War, and America never looked back.
Trouble is, the story is almost entirely wrong. In this collection of essays, all written well before our current crisis-driven expansion in government power, Higgs logically and systematically explodes all of the myths and provides new insights as to how the state response to the Great Depression and Second World War permanently changed both the size and dynamics of government spending in relation to the private economy, and in particular how the larger share of GDP devoted to military spending evolved through the Cold War period.
He starts with the late 1930's and "Great Duration": the question of why the Great Depression lasted so long, much longer than any previous downturn, even ones that were substantially deeper. In fact, it is becoming increasingly accepted in the economics profession (ok, with the exception of DeLong and Krugman) that the policies of the New Deal directly served to prolong the misery.Read more ›
Dr. Higgs' book on the economic history of the United States from the Great Depression to the end of the Cold War is a compendium of ten essays that were put out in various journals during the 1980s and 1990s. Many of the arguments that he puts forth dismisses the contributions of government in the economic health of the country. The first essay contends that the government created an air of "regime uncertainty" that put business on edge during the 1930s. They were uncertain of the outcome of legislation that was coming out of Washington that would drain their resources. Higgs contends that despite statements to the contrary, the nation did not get out of the Depression until the end of World War II when government controls on the economy were lifted.
Other chapters that were interesting to me were the stories of the boondoggles of mandated supply of anthracite coal mined in America to be shipped to Germany at great cost to the Defense Department and the constant continuance of production of unneeded and obsolete fighter jets to keep jobs in the congressional districts and thus gain favor from the constituents. Some of the other chapters were very technical in nature with loads of formulas and equations that were hard for me to follow. This 220-page book contained many endnotes and loaded with massive bibliographies at the end of each chapter. This should be a must read in learning about how government cares little for actual defense of this country and is more interested in lining the pockets of the big business and thus extending the careers of politicians. Four stars.
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Is makes me sad that there is a real debate among economists over the supposed economic benefits of blowing things up. Robert Higgs, an outstanding Austrian economist and historian, delves into this question and uses economic logic and historical data to undermine the Keynesian war=growth nonsense. He argues that wealth destruction does not make "society" rich. I know, I know....that is just crazy, right?
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