The Great Depression in America: Causes, Effects, and Lessons for Modern Economic Crises | Historical Analysis & Financial Insights for Students, Investors & Policy Makers

If we are talking about collectivist government privileges interfering with the sound functioning of a prosperous economy, Rothbard knows we can't start researching the Great Depression with Roosevelt's response to an economic collapse. Rather, there's not much to be said about him in this book.Rather we look to some pretty non-traditional trends in government power. We go before WWI and the ensuing debt, and the resulting advantages in the world economy. Rothbard even goes into a history of America's previous depressions, which we don't hear about, and were all treated with an increased laissez-faire attitude. So we aren't given a "The Great Depression changed everything" theory of unsound economics, just like in foreign policy "9/11 changed everything". In the 1900's, we get a slew of "progressive" government interference with markets. This is not only the FED, but the income tax (reaching 79% in the middle of the depression), union privilege, increased government spending, removing domestic links between the dollar and gold, "protectionist" tariff hikes, price controls, and eventually a mix of fascism and socialism.Part of what Democrats don't like to hear is that Roosevelt was personally complemented by Hitler and Mussolini on his fascist economic system. Eventually America would "solve" its depression the same way Italy and Germany did - nationalism for war and increased military spending.But part of what Republican's don't like to hear is that Hoover started the New Deal, which Rothbard shows is what prevents the economy from recovering as it did in all previous depressions. Hoover supported wage controls in a deflating economy, forcing unemployment, which many people believe WAS the defining characteristic of the depression. Others believe it was the stock market crash. But any quick glance at the changes of money supply shows why prices had to do what they did. In an environment of artificially loose credit created by expanding the money supply, the ability to pay loans and make profitable loans, or even any long-term fixed rate contract, depends upon prediction of the central figures who determine how loose credit will be. Even a small change at the government and FED level can cause a sizeable bust.Many hold "speculation" accountable, saying that the rampant gains of capitalism spurred this reckless speculation. Well, what could be more recklessly speculative than a small group of men trying to set a monetary policy that would simultaneously create massive credit and consumerism? To function properly, the market would have to speculate the decisions of these people, who were trying to speculate the market. There's your excess speculation, which doesn't happen with sound money.Rothbard gives a lengthy and powerful description of the Austrian Theory of the Business Cycle, which Hayek would eventually win a Nobel Prize for. Also, Higgs shows how the depression could have been considered to last until 1946, if you don't believe that military production bought with debt indicates a good economy. Keynesian and military-keynesian approaches to solving depressions took almost 20 years to fix after an inflationary boom of 8 years.I recommend this book to anyone interested in a mixture of government policy and the economics behind the Great Depression. It contains well-written arguments and factual numbers to support them. It is not hard to read, although it will read easier if you know a thing or two about economics. Rothbard shines in being able to speak in clear and simple terms while delivering powerful arguments that anyone should be able to grasp.I do not recommend this book to anyone who is dead-set upon socialism or fascism; however, if you haven't heard of the Austrian Business Cycle Theory to explain the Great Depression, you cannot be dead-set upon those principles. Take the time to read this book. Rational debate requires complete knowledge of opposition viewpoints.I would supplement this book with other literature from Mises, as well as study the financial situation of Japan in the 90's.