Is Another Great Depression Inevitable?

One of our goals at For Freedom’s Sake is to provide the underlying principles, philosophical ideas, facts, and the best and most reliable scholarship available on freedom to our readers.  In doing so, we hope to enable you to navigate through all of the noise and misinformation which blurs our ability to see our nation’s drift toward the elimination of free markets, limited government, private property and religious freedom.

We are doing our small part.  You, however, have to decide what price you are willing to pay if you ignore the assault on your freedom.  You have two options, however you will pay a price one way or the other.  The cost of ignoring the continued usurpation of your freedom and/or the price to preserve your freedom.

The first option is to ignore history and believe that “government is the only solution to our current economic crisis,” a myth which is being perpetuated by the Obama administration and the mainstream media. Thereby providing the justification they need to nationalize more of our economy, tax productive capital, throw good money after bad investments, and redistribute wealth.

Option number two is to do the hard work of committing to a lifestyle of being well read and setting aside some time to think more deeply about the great ideas that contributed to the the establishment of the freest country on earth.  Ideas that must be recovered and thus guide us into the future.  The cost of taking this step is actually quite low, since we do not have to throw off tyranny or pick-up weapons, as our founding father did, but we may have to turn off the T.V., read a good book or find a great resource on the web.

Step one on this journey is to educate yourself on one of the major issues of the day by reading the article, “Great Myths of the Great Depression.” In so doing, you will have the historical facts which will enable you to see more clearly the truth about what economic policies we should be embracing and thereby avoiding the creation of another great depression.

We hope that our growing list of readers continue to take their freedoms seriously by investing their time in understanding what is going on in the world around them.  We further hope you take the cause of freedom one more step and engage your non-political friends in the conservation.  Please recommend blogs like ours and get them thinking about the ideas behind freedom.  As it has been said, “ideas have consequences” and in this day and age the consequences are dramatic.

With that thought in mind we are providing a pdf file of the article entitled, “Great Myths of the Great Depression,” as well as the introduction [posted below] to the article, in this post, so that you can determine if it is worth your time to invest in your understanding of one of the most pressing issues of our day.

For Freedom’s Sake!

“Great Myths of the Great Depression”

Students today are often given a skewed account of the Great Depression of 1929-1941 that condemns free-market capitalism as the cause of, and promotes government intervention as the solution to, the economic hardships of the era. In this essay based on a popular lecture, Mackinac Center for Public Policy President Lawrence W. Reed debunks the conventional view and traces the central role that poor government policy played in fostering this legendary catastrophe.

Introduction
Many volumes have been written about the Great Depression of 1929-1941 and its impact on the lives of millions of Americans.  Historians, economists and politicians have all combed the wreckage searching for the “black box” that will reveal the cause of the calamity. Sadly, all too many of them decide to abandon their search, finding it easier perhaps to circulate a host of false and harmful conclusions about the events of seven decades ago.  Consequently, many people today continue to accept critiques of free-market capitalism that are unjustified and support government policies that are economically destructive.

How bad was the Great Depression? Over the four years from 1929 to 1933, production at the nation’s factories, mines and utilities fell by more than half.  People’s real disposable incomes dropped 28 percent. Stock prices collapsed to one-tenth of their pre-crash height. The number of unemployed Americans rose from 1.6 million in 1929 to 12.8 million in 1933. One of every four workers was out of a job at the Depression’s nadir, and ugly rumors of revolt simmered for the first time since the Civil War.

“The terror of the Great Crash has been the failure to explain it,” writes economist Alan Reynolds.  “People were left with the feeling that massive economic contractions could occur at any moment, without warning, without cause. That fear has been exploited ever since as the major justification for virtually unlimited federal intervention in economic affairs.”

Old myths never die; they just keep showing up in economics and political science textbooks.  With only an occasional exception, it is there you will find what may be the 20th century’s greatest myth: Capitalism and the free-market economy were responsible for the Great Depression, and only government intervention brought about America’s economic recovery.