America's Great Depression
America's Great Depression
Murray N. Rothbard
Contents
Introduction to the Fifth
Edition.........................................................xi
Introduction to the
Fourth Edition..................................................xvii
Introduction to the Third
Edition....................................................xxv
Introduction to the
Second Edition.................................................xxxi
Introduction to the First
Edition....................................................xxxv
Part I: BUSINESS CYCLE
THEORY
1 THE
POSITIVE THEORY OF THE CYCLE.........................3
Business cycles and
business fluctuations............................................4
The problem: the cluster
of error........................................................8
The explanation: boom and
depression...............................................9
Secondary features of
depression: deflationary credit contraction...................................................................................14
Government depression
policy: laissez-faire.....................................19
Preventing
depressions......................................................................23
Problems in the Austrian theory
of the
trade
cycle.....................................................................................29
2 KEYNESIAN
CRITICISMS OF THE THEORY..................37
The liquidity
“trap”...........................................................................39
Wage rates and
unemployment.........................................................42
3 SOME
ALTERNATIVE EXPLANATIONS Of DEPRESSION: A
CRITIQUE....................................................55
General
overproduction....................................................................56
Underconsumption............................................................................57
The acceleration
principle.................................................................60
Dearth of “investment
opportunities”...............................................68
Schumpeter’s business
cycle theory...................................................72
Qualitative credit
doctrines...............................................................75
Overoptimism and
overpessimism....................................................80
Part II: THE INFLATIONARY
BOOM: 1921–1929
4 THE INFLATIONARY
FACTORS...........................................85
The definition of the
money supply...................................................87
Inflation of the money
supply, 1921–1929........................................91
Generating the inflation,
i: reserve requirements.............................95
Generating the inflation,
ii: total reserves......................................101
Treasury
currency.............................................................................116
Bills
discounted................................................................................117
Bills bought–acceptances.................................................................126
U.S. government
securities..............................................................133
5 THE DEVELOPMENT OF THE INFLATION................137
Foreign
lending................................................................................137
Helping
Britain................................................................................142
The crisis
approaches.......................................................................159
6 THEORY AND INFLATION: ECONOMISTS and THE LURE OF A STABLE PRICE
LEVEl.........................169
Part III: THE GREAT
DEPRESSION: 1929–1933
7 PRELUDE TO DEPRESSION: MR. HOOVER AND
Laissez-Faire................................................................185
The development of
Hoover’s interventionism: unemployment...........................................................................188
The development of
Hoover’s interventionism:
labor
relations.............................................................................199
8 THE
DEPRESSION BEGINS:
PRESIDENT
HOOVER TAKES COMMAND...................209
The White House
conferences........................................................210
Inflating
credit.................................................................................214
Public
works.....................................................................................216
The New Deal Farm
Program........................................................217
9 1930.................................................................................................239
More
inflation..................................................................................239
The Smoot–Hawley
Tariff...............................................................241
Hoover in the second half
of 1930...................................................243
The public works
agitation..............................................................250
The fiscal burdens of
government...................................................253
10 1931—“The Tragic
Year”.................................................257
The American monetary
picture.....................................................260
The fiscal burden of
government....................................................263
Public works and wage
rates............................................................264
Maintaining wage
rates....................................................................267
Immigration
restrictions..................................................................270
Voluntary
relief................................................................................271
Hoover in the last
quarter of 1931...................................................272
The spread of
collectivist ideas in the business world.....................277
11 THE HOOVER NEW DEAL OF 1932..................................285
The tax
increase...............................................................................286
Expenditures versus
economy..........................................................288
Public works
agitation......................................................................292
The
RFC..........................................................................................296
Governmental
relief.........................................................................300
The inflation
program.....................................................................301
The inflation
agitation.....................................................................308
Mr. Hoover’s war on the
stock market.............................................316
The home loan bank
system............................................................317
The bankruptcy
law..........................................................................318
The fight against
immigration.........................................................319
12 THE CLOse OF THE HOOVER
TERM..................................321
The attack on property
rights: the final currency failure................323
Wages, hours, and
employment during the depression...................330
Conclusion: the lessons of Mr. Hoover’s
record.............................336
APPENDIX: GOVERNMENT AND THE
NATIONAL PRODUCT,
1929–1932...................................................................339
INDEX.............................................................................................349
Tables
Table 1: Total Money Supply of the United States,
1921–1929.........................................................................92
Table 2: Total Dollars and Total Gold
Reserves............................94
Table 3: Member Bank Demand
Deposits.....................................98
Table 4: Demand and Time Deposits............................................99
Table 5: Time
Deposits.................................................................100
Table 6: Member Bank Reserves and
Deposits............................102
Table 7: Changes in Reserves and Causal Factors . . .
1921–1929................................................................................109
Table 8: Per Month Changes in Reserves and Causal
Factors . . .
1921–1929..............................................................110
Table 9: Factors Determining Bank Reserves
July–October
1929....................................................................166
Table I: National
Product.............................................................341
Table II: Income Originating in
Government.............................342
Table III: Private
Product.............................................................342
Table IV: Government
Expenditures...........................................343
Table V: Expenditures of Government
Enterprises.....................345
Table VI: Expenditures of Government and
Government
Enterprises..........................................................345
Table VII: Receipts of Government and
Government
Enterprises..........................................................346
Table VIII: Government and the Private
Product......................347