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The Rothbard/Higgs/Vedder and Gallaway Thesis


Tags Booms and BustsCalculation and Knowledge


Murray Rothbard argued that the cause of the Great Depression was the result of Herbert Hoover's New Deal policies which sought to keep wages and profits high. Robert Higgs, Richard Vedder and Lowell Gallaway extended this thesis to FDR's New Deal policies which created artificially high prices and profits and prevented the normal market correction processes, reduced employment and consumer demand.

Here is a great video of Lee Ohanian, Professor of Economics at UCLA, explaining how FDR kept the free market from working. It would make a great video to show in class.

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

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