Supporters of Roosevelt's New Deal may be prepared to listen to free-market arguments against it and accept that some criticisms are valid. However, they will often say "yes, but look at GDP growth -American GDP increased from 1933 (after Roosevelt was elected) and was back at 1929 levels by 1936".
They will also blame the increase in reserve requirements and reductions in government spending for the recession of 1937-38 and claim that had a more Keynesian easy-money policy been persuaded, this would not have happened.
Are there any Austrian/free-market works that address these points?
The Independent Institute's Robert Higgs has debunked this. Brilliantly.
You can listen to this to get some arguments.
War Is Good for the Economy?
If you find something evil that wobbles, push it. - Gary North
Thanks, have listened to the link. It seems to focus on GDP increases during the war rather than pre-war though.
Fair enough, but with Higgs you will find your answers.
New Deal GDP
Look at the unemployment figures. Would you really say there can be any meaningful growth when a quarter of the population remains unemployed?
Mises Community Natural Rights Discussion Group
Moar!
Higgs on the Great Depression
FDR Was Wrong All-Around
rpj83: Supporters of Roosevelt's New Deal may be prepared to listen to free-market arguments against it and accept that some criticisms are valid. However, they will often say "yes, but look at GDP growth -American GDP increased from 1933 (after Roosevelt was elected) and was back at 1929 levels by 1936". They will also blame the increase in reserve requirements and reductions in government spending for the recession of 1937-38 and claim that had a more Keynesian easy-money policy been persuaded, this would not have happened. Are there any Austrian/free-market works that address these points?
Yes, the fallacy of the GDP: http://mises.org/story/770
"...The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption.
For instance, if a government embarks on the building of a pyramid, which adds absolutely nothing to the well-being of individuals, the GDP framework will regard this as economic growth. In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth...
...To solve this problem, economists employ total monetary expenditure on goods which they divide by an average price of those goods. There is, however, a serious problem with this. What is price? It is the rate of exchange between goods established in a transaction between two individuals at a particular place and a particular point in time. The price, or the rate of exchange of one good in terms of another, is the amount of the other good divided by the amount of the first. In the money economy, price will be the amount of money divided by the amount of the first good.
Suppose two transactions were conducted. In the first transaction, one TV set is exchanged for $1,000. In the second transaction, one shirt is exchanged for $40. The price or the rate of exchange in the first transaction is $1000/1TV set. The price in the second transaction is $40/1shirt. In order to calculate the average price, we must add these two ratios and divide them by 2. However, $1000/1TV set cannot be added to $40/1shirt, implying that it is not possible to establish an average price.
It is interesting to note that in commodity markets, prices are quoted as Dollars/barrel of oil, Dollars/ounce of gold, Dollars/tonne of copper, etc. Obviously, it wouldn't make much sense to establish an average of these prices. On this Rothbard wrote, "Thus, any concept of average price level involves adding or multiplying quantities of completely different units of goods, such as butter, hats, sugar, etc., and is therefore meaningless and illegitimate..."
At most, 5% of the population would need to stop complying to bring down the government.
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