- Paperback: 216 pages
- Publisher: University of Michigan Press (March 2, 1998)
- Language: English
- ISBN-10: 0472066676
- ISBN-13: 978-0472066674
- Product Dimensions: 6 x 0.6 x 9 inches
- Shipping Weight: 12.6 ounces (View shipping rates and policies)
- Average Customer Review: 7 customer reviews
- Amazon Best Sellers Rank: #1,969,023 in Books (See Top 100 in Books)
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The Great Depression: An International Disaster of Perverse Economic Policies Paperback – March 2, 1998
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Top customer reviews
If you want to read only one book and still understand why the Great Depression happened, read this one.
On a second read though, 'The Great Depression' becomes very irritating; for three reasons....
The first is its changing view of the causes of decline and recovery. It starts out monetarist but ends up closer to the Austrian view that government intervention and socialism prolonged the recovery. You can't be both, although the authors try very hard.
The second problem is the use of history. Many historically minded authors have made a big issue of the vicious Versailles Peace Treaty and its role in destabilising the international payments system. Hall and Ferguson hardly mention international issues. Instead, they waffle on about Hitler's evil labour policies, but forget to mention their effect. Huge capital flows left Europe for the New World in the mid-1930s and these played a very significant role in boosting US money supply and spurring recovery.
The third problem is the book's very simplistic economics. At the heart of the problem was the issue of real exchange rate adjustment amongst Gold Standard members. The authors make no attempt to explain the extent of the adjustment problems when members faced either hyperinflation or balance of payments deficits after 1918.
Countries facing BOP deficits with newly enfranchised labour forces were in no position to use traditional means of real exchange rate adjustment - i.e. deflation - to bring their currencies and payments accounts back into line. Social unrest was everywhere. Impossible strain was placed on domestic economies as interest rates went up. And when Austrian bank, Bank Kredit-Anstalt, failed, the international payments system fell apart and asset prices collapsed. No one had the guts to raise rates to hold currencies within their trading ranges.
Hall and Ferguson gloss over the international angle as if it was irrelevant. They could at least have tried to explain why they thought it wasn't important or didn't play a central role.
All told, I'd recommend this book to anyone coming across this fascinating period for the first time. But there are much better books out there. Also, parochial books with constant references to us and ours when referring to the US and its institutions are really tiresome to non-US readers.
Two stars for the technical bits, the chronology and the details of Roosevelt's New Deal.