Our Economic Past

The NRA: How Price-Fixing Perpetuated the Great Depression

The National Industrial Recovery Act (NRA) dramatically altered America’s traditional free-market system. Under the NRA, a majority of firms in any industry had government approval backed by force to determine how much a factory could expand, what wages had to be paid, the number of hours to be worked, and the prices of products. Whether or not a businessman helped write the code for his industry, he was bound by the terms and subject to a fine or jail term if he violated them.

1Apr2009 | | 26 comments | Continued

Bailing Out the Big Three Repeats Britain’s Mistake

A major reason for any kind of historical writing is to provide guidance for the present. As we read an account of the past, we may see similarities to the present and (we may hope) avoid repeating the same kinds of mistakes. In this sense historiography forms part of the collective memory of a society [...]

28Feb2009 | | 3 comments | Continued

Nixon’s New Economic Plan

Richard Nixon had a crisis mentality. In 1962, unhappily out of public office, he wrote an autobiographical account entitled Six Crises. Whereas some presidents have faced real crises, however, Nixon’s were more the product of his personal sense of siege. As president he twice declared a state of national emergency, first on March 23, 1970, [...]

20Jan2009 | | 2 comments | Continued
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Andrew Mellon: The Entrepreneur as Politician

Rarely do spectacular entrepreneurs leave their realm of business for the political arena. One exception is Andrew Mellon, the third-wealthiest American of his era, who left a dazzling career in American industry to become secretary of treasury under Presidents Warren Harding, Calvin Coolidge, and Herbert Hoover. Mellon established his career in Pittsburgh as a successful [...]

1Dec2008 | | 4 comments | Continued

Historical Reputations

In an election year it is useful to try to remove oneself from the hubbub of daily campaign news and advertisements and to imagine how the candidates will be viewed by historians. This is not a simple exercise, and the attempt will reveal a number of widespread attitudes that affect our view of both past [...]

1Nov2008 | | 0 comments | Continued

The Great Escape from the Great Depression

Questions about the Great Depression may be usefully framed as pertaining to three distinct issues: the Great Contraction, the extraordinarily severe economic decline from 1929 to 1933; the Great Duration, the persistence of subpar economic performance for more than a decade; and the Great Escape, the ultimate recovery from this uniquely deep and long depression. [...]

1Oct2008 | | 6 comments | Continued

Equality, Markets, and Morality

Burton Folsom, Jr. is a professor of history at Hillsdale College and author of New Deal or Raw Deal?, to be published by Simon & Schuster this year. The subject of “equality” is the source of much political debate. Ever since the founding era, free-market thinkers have argued for equality of opportunity in the economic [...]

1Sep2008 | | 6 comments | Continued

The Recurring Crisis

Recently the governor of the Bank of England announced that the “nice” times had come to an end. (In the Bank’s lexicon, NICE = “Non-Inflationary Constant Expansion”). This news will not come as any shock to the many Americans who have had their homes repossessed recently, but it does appear to have startled many of [...]

1Jul2008 | | 0 comments | Continued

Construction Boom and Bust Between the World Wars

Imagine a story about collapse of the real-estate markets that states: “Most of the millions piled up in paper profits had melted away, many of the millions sunk in developments had been sunk for good and all, the vast inverted pyramid of credit had toppled to earth, and the lesson of the economic falsity of [...]

1Jun2008 | | 2 comments | Continued

John D. Rockefeller and His Enemies

One hundred years ago John D. Rockefeller, America’s first billionaire and the head of Standard Oil, faced a critical issue: what should he do about the criticisms of investigative journalist Ida Tarbell? To Rockefeller, the solution was simple—ignore her. He was marketing 60 percent of all oil sold in the whole world. His company was [...]

1May2008 | | 1 comment | Continued

Migration, Markets, and Governments

One of the hottest political topics today on both sides of the Atlantic is immigration. What, though, do we mean by this and what light does history cast on our present concerns and anxieties? Migration, the movement and resettlement of people, is one of the universals of history. In some periods it happens on a [...]

1Apr2008 | | 0 comments | Continued

The New Deal and the State and Local Governments

Until the twentieth century the average American in peacetime had little contact with the federal government, except for the post office, and the federal government’s policies and actions affected most people only indirectly—for example, through land-disposition policies or the tariff’s effect on commodity prices. State and local governments provided nearly all the government services the [...]

1Mar2008 | | 5 comments | Continued

Madison’s Veto Sets a Precedent

Today, when a president looks at a spending bill that has passed Congress, he typically asks, “How will this help my party gain votes?” and “What interest groups will this bring to my side?” Sometimes, when modern presidents are more philosophical, they ask, “Will this spending help the economy, or advance the nation’s interests?” Our [...]

1Jan2008 | | 3 comments | Continued

Two Presidents, Two Philosophies, and Two Different Outcomes

Richard Weaver’s observation that “ideas have consequences” is especially valid when we study the growth of government in America. If we compare the attitudes of Woodrow Wilson and Calvin Coolidge on the Constitution and the Declaration of Independence we can see how their views on government intervention were a logical outcome of their conceptions of these documents.

1Jun2007 | | 0 comments | Continued

Trade and Diversity

Trade is one of the oldest of human institutions, and trading relationships are among the most fundamental of all human relationships. Indeed, we may say that networks of peaceful exchange form the skeleton of all complex human societies. One of the most striking features of trade throughout human history is how it connects people who [...]

1May2007 | | 2 comments | Continued

The Great Contraction, 1929–33

The recession that began in mid-1929 need not have become a disaster. Many downturns had occurred previously in U.S. economic history, and nearly all of them had been fairly shallow and soon followed by recovery and continued growth. In the nineteenth century most people had believed that the government neither knew how nor possessed the [...]

1Apr2007 | | 0 comments | Continued

Death by Public Works

Almost all historians who write on the New Deal praise Franklin Roosevelt for using government to “solve” economic problems. Often, however, these historians only tell part of the story. One example is Roosevelt’s vast public-works program. Here most historians wax eloquent on the dams built by TVA, the roads built by WPA, and the bridges [...]

1Mar2007 | | 1 comment | Continued
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