Quarterly Journal of Austrian Economics

Industrial Employment and the Policies of Herbert C. Hoover

The Quarterly Journal of Austrian Economics
Downloads

Volume 13, Number 3 (Fall 2010)

 

Most historians claim that Herbert Hoover adhered to a policy of laissez faire after the stock market crash of 1929. This laissez faire policy is allegedly responsible for the severity and persistence of unemployment during the early years of The Great Depression. Herbert Hoover actually reacted to the crash of 1929 by urging industrial leaders to keep money wages high. Hoover believed that high wages would support consumer spending and spur recovery. This paper extends the hypothesis advanced by Rothbard (1972) that Hoover’s high wage policy intensified and prolonged unemployment during the depression. Analysis of wages and employment in specific industries indicates that Herbert Hoover successfully increased real wages. There are strong correlations between real wages and employment losses in the industries that Hoover intended to influence. The evidence indicates that Hoover’s activist high wage policy prolonged and intensified unemployment during the early years of the Great Depression.

CITE THIS ARTICLE

MacKenzie, Douglas W. “Industrial Employment and the Policies of Herbert C. Hoover.” The Quarterly Journal of Austrian Economics 13, No. 3; (Fall 2010): 101–119.

All Rights Reserved ©
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute