Customer Reviews

Rethinking the Great Depression (American Ways Series)

5 star:		(11)
4 star:		(6)
3 star:		(3)
2 star:		(1)
1 star:		(2)

 

 

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.

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.

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.

This book is simple, clear and accurate. I've turned to it over and over again and can't recommend it too highly. Smiley is especially good when he gets to the second half of the 1930s. I have one copy at the office, one copy at home and carry one around in my backpack when there's room. Also great: Jim Powell's "FDR's Folly," "The Great Depression" by Thomas E Hall and J David Ferguson, Allan Meltzer, and of course Friedman and Schwartz. Superb but hard to get: Lester V Chandler.

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.

Gene Smiley's Rethinking The Great Depression blends history and economics in a survey which draws upon recent technical analysis to consider new ideas about the roots of the Depression. The efforts of the New Deal to combat the crisis, the underlying foundations of the Depression, and misguided monetary policies which prolonged it accompany refutes to popular beliefs - such as the positive view of World War II as a key to ending the crisis.

Considering the current economic environment, this book should be read by anyone who wants to understand the differences between what really happened during a very, very difficult time in history vs. the odious comparisons some have made to it in an attempt to describe our present crisis. I found this book by reading Amity Schlaes very good book, "The Forgotten Man." Her book drew some very interesting contrasts to Conrad Black's epic biography of FDR.

Although an academic, Smiley writes so clearly and picks his themes so wisely that, like Amity's telling book, I now understand the Depression to have been unnecessarily prolonged by government intrusion and the unwise application of high taxes and tariffs.

The book is brief enough and well researched so that I can hardly add more here other than to highly recommend it.

Rethinking the Great Depression is a highly informative book. Its importance derives from the widespread misconceptions regarding the Great Depression. Americans are usually taught that Hoover wrecked the economy with Laissez Faire policies, and FDR saved us with The New Deal. Smiley demonstrates that absurdity of what we are usually taught. This book should be used in every high school history class, as opposed to the mythology that so often passes for history. This is an effective antidote to the phony history advanced by Arthur Schlesinger.

Exactly what economic history for the layman should be: clear, concise, with solid explanations and insights. And while giving a free-market perspective, it's scholarly instead of just a rant against FDR. Some economics background would probably be helpful, but he walks you through the concepts that you need to understand it.

This is a brief and relatively easy to read monetarist review of 'the great depression'. As such, it is unclear to what "rethinking" in the title might refer. My guess is that the author is rethinking Keynes, though more time is spent on FDR. Since the difference between Keynes and monetarists is subtle to all but Keynesians and monetarists, I wouldn't recommend this as a introduction to the subject, nor as a survey.

The text presents a matter of fact narrative, starting in 1929 and ending with the war efforts of 1940. The author asserts that uncoordinated national monetary policies and shrinking money supplies were the Great Depression's cause. The relationship between gold and the national currency is used to measure the success or failure of national monetary policy over time. Unaware of the relationship between money supply and economic goals (full employment, growth, etc), both Hoover and FDR made the necessary economic correction prolonged and painful. According to the author, the misguided new deal programs started by FDR have taken on a life of their own. The problems posed by 'New Deal' government programs consumes most of the concluding remarks. To end the book, Smiley writes "What failed in the 1930s were governments, in their eagerness to direct activity to achieve political ends... Attempts to stop international financial markets from working through the gold standard brought on the depression. Government efforts to combat the depression ... made the depression much longer and more severe in the United States. Government attempts to reshape American society ... helped create a depression within the depression.'

Though one might think this comes across as a polemic against FDR and what the author calls 'socialism', the author takes pains to show that everyone, including all the economists, misunderstood the 'depression'. Despite his confident narrative, the author doesn't exclude himself in this assessment. In a telling comment near the end of the book, Smiley states 'Still, our continued inability to develop econometric models that can accurately predict contractions means that we will not be free of them.'