Rethinking the Great Depression (American Ways Series) [Paperback]

Gene Smiley (Author)

Book Description

Publication Date: July 21, 2003 | ISBN-10: 1566634717 | ISBN-13: 978-1566634717

The worldwide Great Depression of the 1930s was the most traumatic event of the twentieth century. It ushered in substantial expansions in the role of governments around the world, focused attention on social insurance, and for a time bolstered socialist economic ideas as a form of cure. Skepticism about the effectiveness of government withered as the free market failed, and it seems safe to say that Keynesian economics would not have flourished if the depression had not occurred. While this severe contraction has been extensively examined, we are just now—thanks to increasingly sophisticated analytical techniques—beginning to comprehend its causes and the reasons for the extremely slow recovery that occurred in the United States. Much of this analysis, though, remains in specialized studies that are visited mainly by economists and economic historians. In Rethinking the Great Depression, Gene Smiley draws upon this recent scholarship to present a clear and nontechnical analysis for the general reader. He explains the roots of the depression in the 1920s, the efforts of the New Deal to combat the economic crisis, and the legacy of these efforts in World War II and the postwar years. He offers new insights and some surprising conclusions: that the causes of the Great Depression lay in the dislocations caused by World War I and the attempt to reconstitute an international gold standard in the 1920s; that the New Deal, regardless of its good intentions, adopted misguided fiscal and monetary policies that prolonged the depression in the United States beyond what it should have been; that World War II, rather than stimulating an end to the depression, actually postponed a full recovery until 1946.

Editorial Reviews

From Booklist

Smiley, an academic, revisits the Great Depression, the period from 1929 until 1933 that had such a slow recovery that the whole decade of the 1930s is often considered the Depression. Armed with increasingly sophisticated analytical techniques, the author sets out to survey the 1930s so that readers without training in economics have a better understanding of the forces at work during this period. In his view, the Great Depression prompted growing intellectual fascination with socialist economic ideas and precipitated World War II, which in turn led to the spread of communism worldwide. This era gave rise to Keynesian macroeconomics, which explained the Depression and advised how to get out of it and is now mainstream economic analysis. Smiley contends that "in many ways the Great Depression was the defining moment for 20th Century America." Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.

Review

A remarkable achievement . . . Smiley has succeeded in presenting a brief, fact-rich account . . . in clear, nontechnical prose. (Robert Higgs, editor, Independent Review)

An insightful, well-written survey . . . the author weaves an engaging narrative . . . impressive and accessible. . . . Recommended. (Library Journal)

Gene Smiley's explanation of the Great Depression benefits from his expertise in banking and the international gold standard. (Larry Schweikart, University of Dayton)

Short in length but long on insight . . . a masterful account. . . . It will be required reading. (Richard Vedder, Distinguished Professor of Economics, Ohio University)

A serious second look at the New Deal that historians will ignore at their peril. (Alonzo L. Hamby)

A brief and provocative account. . . . Smiley knows the current literature well, and makes good use of it in his analysis. (Virginia Quarterly Review)

This is a careful, systematic review of literature on the Great Depression, not a once over treatment. . . . The book is well written, strives for comprehensiveness and balance. (The Journal Of Economic History)

Economist Smiley . . . has produced . . . a slim and readable volume . . . in language that should be clear and understandable to students. (CHOICE)

Incorporates the findings of recent scholarship into an accessible survey of the economic events of the 1930s. (Journal Of Economic Literature)

Economic historian Gene Smiley has performed a valuable service for all readers, academic and general. . . . A concise description of the economic influences and course of the Great Depression. (Liberty Press)

The author writes in a clear, engaging, and jargon-free style and does a good job of outlining the key events of the period for nonspecialists. Provides a handy introduction to the Great Depression. (The Historian)

An engaging, balanced, and perceptive short book. . . . Smiley brilliantly describes this tragedy and its long-term consequences. (Claremont Review Of Books)

A book of equal value both to laypersons and to professional economists. . . . Well written. (Jim F. Couch Public Choice)

A slender but engaging volume, one approachable by the nonspecialist. (Business History Review)

See all Editorial Reviews

Product Details

• Paperback: 192 pages
• Publisher: Ivan R. Dee (July 21, 2003)
• Language: English
• ISBN-10: 1566634717
• ISBN-13: 978-1566634717
• Product Dimensions: 7.1 x 0.6 x 8.2 inches
• Shipping Weight: 7.8 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (22 customer reviews)
• Amazon Best Sellers Rank: #623,012 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

85 of 96 people found the following review helpful

5.0 out of 5 stars The Great Depression Reassessed From a Free-Market Viewpoint December 31, 2002

By L. Orr

Format:Hardcover

Gene Smiley, a protege of the free-market-oriented Austrian and Chicago schools of economics, has written a concise and readable book that challenges some long-held beliefs about the Great Depression.

Smiley presents a convincing case that the calamity was brought on, not, as is widely believed, by flaws in the free enterprise system, but by government policies, in particular, attempts to manipulate the gold standard. He then shows how the well-intentioned but wrongheaded interventionist policies pursued by the Herbert Hoover and Franklin D. Roosevelt administrations to combat the Depression actually prolonged and deepened it.

Smiley also presents evidence that the "boom" of the World War II years was actually a bust, and that true prosperity only returned when Washington turned away from New Dealism following the election of the Eightieth Congress in 1946. His insightful discussion as to whether or not another Great Depression could occur should be of particular interest to contemporary readers.

Although written for a general audience, Smiley's book is well researched and includes an extensive bibliography. It will make a useful addition to the bookshelf of anyone interested in the Great Depression, American history, or macroeconomics.

56 of 63 people found the following review helpful

5.0 out of 5 stars new look at country's worst crisis March 5, 2004

By David Group

Format:Paperback

Based on new theories, Smiley has re-examined and re-assessed the forces that led to and prolonged the Great Depression. In clear non-technical prose, he shows what happened and why.

This short book (163 pages plus sources and index) is divided into five chapters. Chapter 1 gives a brief overview of how the worldwide depression began and how it created a domino effect throughout Europe and the U.S. Nothing new here-- in fact, this is basic stuff any high schooler should know.

Chapter 2 is a more detailed examination of the economic crisis and the forces which led to it. Smiley explains the situation in basic terms that anyone can understand, allowing us to see the tragedy unfolding step by step.

Chapters 3 and 4 show how President Roosevelt (who had little knowledge or experience of economics) attempted to pull the country out of this deep economic slump. Though some programs were successful, some were not, and only serve to create a depression within a depression in the mid-30s.

Chapter 5 examines the legacy of the governmental response, and how economic policies initiated during this period has affected this country for decades afterward, and how certain government programs still exist long after their usefulness has passed. An examination of post-war analysis shows how Keynesian economic theory and government studies have misinterpreted the factors which brought this country back to recovery. He also examines the question of whether such an event can happen again, concluding that-- based on subsequent economic downturns-- it probably won't, though it can happen again should future leaders ignore the warning signs and lessons of the past.

A fascinating and rewarding book, even for those who have little or no knowledge of economics.

42 of 50 people found the following review helpful

5.0 out of 5 stars Concise, well orginized, and a fantastic read. June 3, 2003

By James R. Johnson

Format:Hardcover

This book is only 175 pages, but dense in material. Smiley argues that FDR's New Deal, actually prolonged the Great Depression, and created a "depression within a depression." FDR, and his advisors, self nicknamed "the brains trust", put their New Deal emphasis in stiffling the free market forces, that were actually recovering the American economy from the world depression, of the early 1900's. Also, Smiley sheds light on the false notion that war is good for the economy. This book is written in such an understandable and concise style, that even the bibliography reads like a integrated chapter, where Smiley explains what he used within each reference.

I would recommend this book as a first read, or primer, for the Great Depression. I really enjoyed it.

12 of 13 people found the following review helpful

5.0 out of 5 stars Accuracy matters January 7, 2010

By MT57

Format:Hardcover

In an effort to write a review that you might find "helpful", I think it is important to alert you that only some of the reviews below are accurate; certain of the reviews below, for whatever reason, inaccurately describe the book.

The author, a professor of economics at Marquette, identifies three main factors that caused the Depression to last as long as it did and be as deep as it was: the collision between the fixed gold standard and widely divergent economic performance of individual nations; the burden of German reparation payments on the international flow of goods and capital; and misguided policies of the federal government such as Hoover's jawboning against wage flexibility; the New Deal's program to cartelize American business (as a compromise between the overt socialization that some FDR advisors wanted and the prevailing wisdom of free enterprise); and the effect that populist demagoguery and legislation had on business confidence and investment in 1937-38. Reviews that imply that the author has ignored the first two factors are simply wrong as to what is in the book.

Contrary as well to the inaccurate reviews, the author does not blame FDR for the Great Depression. He quite clearly states that the Great Depression began in 1927-28 in the US agricultural sector and in several foreign nations, in the way that the Mississippi begins in a Minnesota stream; that the stock market crash was in part a symptom of the weakening economic outlook as opposed to the start of the Depression. As he moves chronologically through the period, he first arrives at Hoover and thoroughly criticizes him as noted above. While he goes on to find many flaws in FDR's decisions, he is not one-sided.... Indeed, he credits FDR's 1933 decision to devalue the dollar and stimulate inflation as the first smart thing that was done to reverse the slide that Hoover had exacerbated.

While the author discloses his perspectives up front, I did not find them to be unusual. For instance, many of his observations about both Hoover and FDR echo those made in "Freedom from Fear" the volume from the Oxford Series on American history that covers the period. In fact, I found the title of the book, "Rethinking the Great Depression" to be a bit of an overstatement. Much of what is in here is conventional wisdom.

The one area that might be considered a departure from Conventional Wisdom is the author's brisk rejection of Keynes. He provides, by the way, a very usefully concise summary of what Keynesianism is. The criticism of Keynes is brief and really beyond the scope of a review of this book.

Another area, of lesser importance perhaps, in which he departs from the CW, is his discussion of WWII economic data. He says that the data are simply wrong in major ways and the economy did not actually recover during the war; he points out that the standard of living did not actually improve. He argues that government bond issuance soppped up funds for consumption and forced people to save for the postwar period and it was the release of the pent up savings, coupled with the change in national psychology in the post war period, that were where the recovery from the Great Depression actually began. I think his analysis is incomplete and not entirely correct but I attribute that in part to the fact that this is meant to be a short, easily read book and not a comprehensive proof of every point. It is an interesting thought that anyone studying the period or the arguments about it should keep in mind.

The book is written at a level that is readable by the lay person and probably pitched toward a college student with an interest in American history and minimal background in economics. In terms of the quantity of its pages, it is actually more of a history book than an economic analysis. Because of its concision and accessibility, I give it 5 stars. Read more ›