Name: America's great depression
ISBN: 9780836206340

America's great depression

Applied Austrian economics doesnt get better than this. Murray N. Rothbards Americas Great Depression is a staple of modern economic literature and crucial for understanding a pivotal event in American and world history. The Mises Institute edition features, along with a new introduction by historian Paul Johnson, top-quality paper and bindings, in line with the standard set by The Scholars Edition of Human Action. Since it first appeared in 1963, it has been the definitive treatment of the causes of the depression. The book remains canonical today because the debate is still very alive. Rothbard opens with a theoretical treatment of business cycle theory, showing how an expansive monetary policy generates imbalances between investment and consumption. He proceeds to examine the Feds policies of the 1920s, demonstrating that it was quite inflationary even if the effects did not show up in the price of goods and services. He showed that the stock market correction was merely one symptom of the investment boom that led inevitably to a bust. The Great Depression was not a crisis for capitalism but merely an example of the downturn part of the business cycle, which in turn was generated by government intervention in the economy. Had the book appeared in the 1940s, it might have spared the world much grief. Even so, its appearance in 1963 meant that free-market advocates had their first full-scale treatment of this crucial subject.

What Hacker News says

kriroJan 2019

Oh boy from experience this is a very loaded discussion.

I personally like the Austrian framework because I find it aesthetically pleasing (I guess I'm a sucker for deduction). Some of the writing is simply intellectually interesting and also very scholastic for lack of a better word. For example, even if you completely disagree with the analysis I'd argue that "America's Great Depression" is a very good read simply from an intellectual point of view and "Man, Economy, State" is a very good tome that contains a framework of thought. I also enjoy the science theoretical musings quite a bit. The writing on Aristotelian ontology is very good for example.

There's also works where I constantly shake my head at the implications and political conclusions but intellectually I still love them. "The Ethics of Liberty" is probably the clearest example of this. Do I think that letting a baby starve to death because it is basically a parasite is morally desirable: no. Do I find the idea of trying to deduce an entire ethical framework from first principles fascinating and the way it is done interesting: yes

There are lots of things about AE that I find irking but the core theory and the science theoretical basis is very interesting/intriguing to read.

I also like that pretty much everything is readily available on mises.org. I wish all "schools of thought" would be this forward thinking.

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padobsonMay 2017

It's not new at all. It's actually fairly easy to demonstrate. I recommend Murray Rothbard's America's Great Depression[0] from 1963.

The quick hit is this: A. US Monetary policy provides large banks with extremely cheap capital B. Large banks competing with each other in the free market must make use of that capital C. Only so many investments are good investments, because in the end, there's only so much consumption, but the unnatural levels of capital driven by US monetary policy push banks to make bad investments (see every financial crisis since the Fed was founded). D. Those bad investments fail, and mass margin calls lead to an economy-wide de-leveraging that destroys economic growth for months or years.

Systemic financial crises can't happen without cheap, printed money.

It's also reasonable to question whether giant companies could exist at all without US monetary policy. Companies of that size are almost completely dependent on the financial industry, which is completely dependent on the Fed's cheap currency.

[0][PDF]https://mises.org/files/americas-great-depressionpdf-0/downl...

Edit: added PDF label

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vijayboyapatiJul 2015

I've read it. Galbraith's history is ok and his writing is entertaining but his economic analysis is terribly flawed. I recommend Rothbard's America's Great Depression for a solid economic analysis of the causalities involved in taking a market crash and turning it into a depression. The book is available in pdf free online: https://mises.org/library/americas-great-depression

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gdubsJan 2015

If the population collapse wasn't economically devastating than this would be true. But, according to the book, lower fertility rates result in an aging population that becomes an economic liability -- especially if it happens rapidly. In an economic crisis, resources become constrained even if there are technically plenty to go around. I'm sure there are examples of this in America's Great Depression.

I'm not by any means an expert in this area -- just doing the best I can to paraphrase what so far has been a very interesting and paradigm shattering book.

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freeasindaveJan 2015

You're assuming macro-economics is concrete, peer reviewed science. Lot's of people disagree. The great depression lasted way longer than it should have because of the anti-deflationary measures put into place, like slaughtering millions of livestock to prop up commodity prices while starving, out of work people looked on in horror. If prices had been allowed to fall, wage rates could have come down to a price where hiring made sense.

Read Rothbard's "America's Great Depression" for a good overview of the case against macro-economics and deflationary interventionism.

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econgeekerJun 2011

I think I have a better way of making the point you're trying to make. You're rebutting the claim that reliance on the gold standard made the depression worse.

However, in the early 1930s, the monetary use of gold was criminalized in the USA. In fact, possession of gold itself was illegal for individuals (with the exception of jewelry) until sometime in the 1970s!

while many people refused to turn the gold in as the government demanded in the 1930s, they instead shipped it overseas, and at any rate you couldn't do contracts in gold or make payments in gold without risk of getting in trouble.

This action effectively invalidated much (maybe most?) of the countries wealth, and so it is no surprise that the result was a great depression, or a prolonged depression.

Further, rather than adhering to a hard money position, as is popular for political economists to posit today, the actual position was inflationary. This position is well argued by Rothbard in his book "America's Great Depression".

The reason the myth of "hard money" prolonging the great depression persists, is because governments want an inflationary monetary policy to allow them to spend without the fiscal restraint that would be imposed by having to raise via taxes and fees, all the money they want to spend.

Your position is absolutely right, and you've been attacked by others for citing someone with the "fallacy of appeal to old foggies". Rothbard's analysis was done in the 1970s, I believe, and is effectively contemporary. (Or at least I'm not aware of any serious attempts to refute it.)

Unfortunately, in popular culture the science of economics does not get much respect, going against the popular political perception of inflation being "good" and I've gotten banned from hacker news for making economic arguments like the one I've just made. Which is why this is the first post from a new account. (It is unfortunate that Hacker News does not tolerate differing opinions. But as anyone can see from this post, the salient fact-- that gold was banned-- is undisputed historical fact that blows the operating theory out of the water... and thus I have contributed to this discussion historical facts that are relevant to it. Should I be praised for that? Or banned for disagreeing with the party line? (or for pointing out that I've been banned in the past? I think the censorious nature of this site is employed to keep hidden its intolerance... so I might get the ban for that... but you never know because there is no warning, you just suddenly get the ax. My last account's karma was about 1,200 acquired over 6 months of contributions.) Consider this warning about the nature of this site the payment I require for going thru the effort of making a new account to contribute this critical historical fact to the discussion.

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