Customer Reviews

Depression, War, and Cold War: Studies in Political Economy

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I know you're not supposed to give away a books plot in a review, however, the Depression ended, we won World War II, and then the Cold War began and lasted for nearly fifty years, though not necessarily in that order.

When I began reading Depression, War, And Cold War, a collection of essays and articles spanning almost two decades, my first thought about Robert Higgs was that he has an ax to grind.

In the introduction he elaborates the Military Industrial Congressional Complex (MICC) and then goes on to assert, "...if the Soviet government did the devil's work, so, on many occasions, did the U.S. government and its allies. Not the least of the self-damage was the transformation of the executive branch of the federal government into a secretive, highly discretionary, often ill-advised and badly informed organization that was far too dedicated to attempting the futile task of running the whole world." He then proposes to examine the evidence and the circumstances surrounding the events in the book's title, something Mr. Higgs admits very rarely happens without bias in the study of economic history.

The text, for the most part, focuses on an analysis of the "war is good for the economy" myth. This is where Robert Higgs, as an economist, shines. He provides the framework to see events surrounding World War II as an end to "regime uncertainty" and not as the actual catalyst for any kind of boom. He then goes on to dissect the troubled relationship between government and industry that prolonged the Depression, and analyzes the subsequent policy and personnel changes that encouraged everyone to enter once again into discourse. Changes, incidentally, that still affect every American today almost seventy years later.

There are two chapters on Congress that, while highly entertaining, are mostly anecdotal but do make you want to query your Congressman about being a "pork hawk". Here he admirably shows a lot of tact by using "misfeasance" instead of a harsher term. Next come private sector profits and the gaps in shareholder returns between companies involved in defense contracts and those not. The last chapter tells how the public can sway the system and also be swayed by the system.

Judging from the statement, "We are talking about history, not physics; unique events may have unique causes," Mr. Higgs seemed to have two targets for his ax. The first target is regular people in whom he wishes to instill the notion that history repeats itself unless they fully understand its implications. The second are the Keynesian economists whom he thinks just plain get it wrong.

After finishing the book though I've decided it wasn't an ax being ground and that, if anything, it's probably lenses so we can all see where we've been and in turn where we're heading.

Higgs is one of those annoying academics who actually believes that research is an important task. (I said annoying with tongue in cheek). He writes clearly about the effects of the depression and in this collection of essays argues that neither the New Deal nor WWII took us out of the depression. He makes a good case because he is careful both with his history and his data.

This is a thoroughly readable book which everyone who is interested in our current economic problems should read.

In this thourough and origional work, Professor Higgs exposes just what got our country out of Hoover and Roosevelt's Great Depression. Roosevelt was gone, over ten million young men came home and entered productive private employment and government spending was slashed by two-thirds.

Such insight can get us out of the Bush/Obama Depression too. We should bring home our troups and close the thousand bases they populate while slashing government spending by two-thirds.

Since I am deep into Revisionist History and don't like FDR, I was eager to get this book. However, it starts slow and then tapers off. I'm glad I bought my copy used.

The book was not written as a whole. It is an assemblage of magazine articles, some several decades old. This has the effect that not only do the chapters fail to connect or build upon each other, there is the problem that a chapter with 15 pages of text and graphs is padded out with 5 pages of notes and references. The notes and references are there for reasons that perhaps make sense in dusty professional journals, but most readers will be hard pressed to understand why Higgs regularly cites 8 or more sources for the same fact. In the same vein, in what is advertised as a discussion of the economics of the "hot" war of WW2 and the subsequent Cold War of Containment against Communism, Higgs spends 56 of book's meager 208 pages simply complaining about how American domestic politics affect some DoD spending. Since Higgs had already established that the government portion of US GNP has been essentially flat at 20% since the Korean War, the readers would be better served by some discussion of the interplay between military and non-military federal spending within that 20%.

Another shortcoming, probably resulting from the preparation of the material in the 1980s and early `90s, is that the tables and graphs are breathtakingly crude, the kind of work one would expect from a bright high school student. Modern PCs can of course whip out not simply more visually attractive graphics, but allow for much more complex exploration of the data. Since the actual work of choosing and applying deflators and other adjustments is not shown in the book, one can either attempt his own recalculations using the raw data or accept what Higgs says he did. I understand enough about statistics to generally understand what he says he did. I can't imagine most readers will bother with an independent calculation.

And on the data itself, Higgs chooses 1938 as the earliest date for any of his analyses. This makes no sense, especially when discussing the 1940-41 transition to WW2. What's clearly needed is data that goes back to 1910 and shows the comparable buildup and disarmament for WW1, which was the original American experiment with "command economy" and central planning. As presented by Higgs, the reader gets neither the sense of how the civilian economy of 1945 compared with the deep Depression of 1935, nor any feel for what a non-Depression, non-war US GNP was like prior to 1929.

A few personal comments. For most Americans, choosing to label the non-military portion of federal budgets as "roads" (to contrast with Hermann Goering's famous "guns" and "butter") instead of "welfare" should raise some eyebrows about Higgs' personal politics. This is especially true after Higgs implies that there was never any real threat from Russian Communism and that The Cold War was a scam created in Washington to mislead the American voters into supporting excessive military spending.

In summary, Higgs' basic ideas that the delay in the recovery of the US economy from The Great Depression is obscured by increased military spending for WW2 and that the Depression continued into 1947 are useful and apparently true. But you don't need this book to convince yourself of that. The key chapters of the book are available online, free.