America's Great Depression

AMERICA'S GREAT DEPRESSION
by MURRAY N. ROTHBARD

www.mises.org


Applied Austrian economics doesn't get better than this. Murray N. Rothbard's America's 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 Fed's 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. The damage to the intellectual world inflicted by Keynesian- and socialist-style treatments would be limited from that day forward.





Contents



Part I: BUSINESS CYCLE THEORY

Chapter 1 THE POSITIVE THEORY OF THE CYCLE
Business cycles and business fluctuations
The problem: the cluster of error
The explanation: boom and depression
Secondary features of depression: deflationary credit contraction
Government depression policy: laissez-faire
Preventing depressions
Problems in the Austrian theory of the trade cycle

Chapter 2 KEYNESIAN CRITICISMS OF THE THEORY
The liquidity "trap"
Wage rates and unemployment

Chapter 3 SOME ALTERNATIVE EXPLANATIONS OF DEPRESSION: A CRITIQUE
General overproduction
Underconsumption
The acceleration principle
Dearth of "investment opportunities"
Schumpeter's business cycle theory
Qualitative credit doctrines
Overoptimism and overpessimism




Part II: THE INFLATIONARY BOOM: 1921–1929

Chapter 4 THE INFLATIONARY FACTORS
The definition of the money supply
Inflation of the money supply, 1921-1929
Generating the inflation, i: reserve requirements
Generating the inflation, ii: total reserves
Treasury currency
Bills discounted
Bills bought-acceptances
U.S. government securities

Chapter 5 THE DEVELOPMENT OF THE INFLATION
Foreign lending
Helping Britain
The crisis approaches

Chapter 6 THEORY AND INFLATION: ECONOMISTS and THE LURE OF A STABLE PRICE LEVEL




Part III: THE GREAT DEPRESSION: 1929-1933

Chapter 7 PRELUDE TO DEPRESSION: MR. HOOVER AND Laissez-Faire
The development of Hoover's interventionism: unemployment
The development of Hoover's interventionism: labor relations

Chapter 8 THE DEPRESSION BEGINS: PRESIDENT HOOVER TAKES COMMAND
The White House conferences
Inflating credit
Public works
The New Deal Farm Program

Chapter 9 1930
More inflation
The Smoot–Hawley Tariff
Hoover in the second half of 1930
The public works agitation
The fiscal burdens of government

Chapter 10 1931—"The Tragic Year"
The American monetary picture
The fiscal burden of government
Public works and wage rates
Maintaining wage rates
Immigration restrictions
Voluntary relief
Hoover in the last quarter of 1931
The spread of collectivist ideas in the business world

Chapter 11 THE HOOVER NEW DEAL OF 1932
The tax increase
Expenditures versus economy
Public works agitation
The RFC
Governmental relief
The inflation program
The inflation agitation
Mr. Hoover's war on the stock market
The home loan bank system
The bankruptcy law
The fight against immigration

Chapter 12 THE CLOSE OF THE HOOVER TERM
The attack on property rights: the final currency failure
Wages, hours, and employment during the depression
Conclusion: the lessons of Mr. Hoover's record




APPENDIX: GOVERNMENT AND THE NATIONAL PRODUCT, 1929-1932 (p339)
Tables
Table 1: Total Money Supply of the United States, 1921-1929
Table 2: Total Dollars and Total Gold Reserves
Table 3: Member Bank Demand Deposits
Table 4: Demand and Time Deposits
Table 5: Time Deposits
Table 6: Member Bank Reserves and Deposits
Table 7: Changes in Reserves and Causal Factors . . . 1921-1929
Table 8: Per Month Changes in Reserves and Causal Factors . . . 1921-1929
Table 9: Factors Determining Bank Reserves July-October 1929
Table I: National Product
Table II: Income Originating in Government
Table III: Private Product
Table IV: Government Expenditures
Table V: Expenditures of Government Enterprises
Table VI: Expenditures of Government and Government Enterprises
Table VII: Receipts of Government and Government Enterprises
Table VIII: Government and the Private Product

--------------------------------------------------------------------------------

Copyright © 1963, 1972 by Murray N. Rothbard
Introduction to the Third Edition Copyright © 1975 by Murray N. Rothbard
Introduction to the Fourth Edition Copyright © 1983 by Murray N. Rothbard
Introduction to the Fifth Edition Copyright © 2000 by The Ludwig von Mises Institute
Copyright © 2000, 2005 by The Ludwig von Mises Institute