Topher Morrison
This is what was sold to the American working class and all over Europe, a repackaging of benighted policies, by an odd amalgam of interests including, but not limited to eager politicians, "...wealthy industrialists, heads of multi-national banking, leaders in the academic world, and some of the more innovative minds in media" according to Skousen. While their goals were progressive, as their moniker insinuates, their methods for achieving those goals were in fact regressive. American aristocracy required a powerful and gullible ally in its quest to fend off the waves of creative destruction inherent within capitalism, the working masses offered that alliance. From Appleby:
It is like walking into a classroom where the professor is teaching a class about how the Soviet Union put the first man on the moon...
It seems as though every time someone refers to the Great Depression they subsequently thank Franklin Delano Roosevelt for literally digging us out of it. If they don't they invariably annunciate the macroeconomic dogma (the belief that public institutions ought to influence the economy), that the Great Depression "shattered" the previous orthodoxy presumed by our Constitution, that free markets are self correcting.
While this may be true, that economic mores radically changed after the turn of the century, to not thoroughly explore why we abandoned over 125 years of tested theory, practices, which raised a feeble constellation of colonies into an unparalleled economic power by 1900 is blatant intellectual disinterest and frankly annoying.
The problem with using the Great Depression to bolster the macroeconomic strategies of monetary and fiscal stimulus, favored tools of the new economic vantage, is they were used just before, during, and after the decade long depression and therefore can be included among those suspected influences, which exacerbated what would arguably have otherwise been only a serious recession. Banking panics prior to 1929 stretching back to the founding never persisted for more than a couple years let alone over a decade!
Furthermore, the previous orthodoxy's policies, those promulgated by Adam Smith and lain down officially by the Founders, suffered damning blows in 1913 (see Federal Reserve, 16th and 17th Amendments) and were almost all effectively on the bench by 1933. To blame laissez faire economics, an environment where interactions between private parties are free from government intervention, for the Great Depression and its abnormal longevity is not dissimilar to blaming a sidelined quarterback for his backup's interception and the subsequent touchdown.
To be sure, the prospect that public officers could wield control over our economic environment was (and still is) intoxicating and considering what we had achieved since our founding it was a pretty easy sell. The very idea of control is incredibly self aggrandizing and antithetical to free markets as Adam Smith, the father of capitalism, according to Joyce Appleby: "described an economic universe that was not subject to the laws of the state, but on the contrary, subjected the state to its laws." In other words, the government can't make the grass green. We may be able to isolate and explain many parts of an economy because of these known laws, but to expect to steer the fluidity, dynamism, and titanic scope of modern economies with any sort of precision parallels only the naïveté and results of the Sorcerer's Apprentice.
The motives for abandoning over a century of limited intervention was not to create an army of patriotic economic sentinels through the Federal Reserve, economic councils, or the alphabet soup of regulatory agencies. The United States scuttled sound economics because of a newly landed elite's common desire to accomplish what European aristocracy had achieved, government sponsored capitalism also known as "crony capitalism." It is imperative to understand this was not the necessary evolution of capitalism, quite the opposite, it was a return to feudalistic if not mercantilistic economics! According to W. Cleon Skousen:
Capitalism, an economic and political system where trade and industry are controlled solely by private owners, is a novel idea to this world. The relationship between the state and the economy, until the 1700s, had historically been an intimate one; the nostalgia, therefore, to recapture lost conventions was persuasive. In the words of Mrs. Appleby:
“In Europe, certain confederations of wealthy families had gained control of their respective governments and were making a financial killing. Some of the wealthy families in America coveted the rich government monopolies of their trans-Atlantic cousins.”
Look no further than J.D. Rockefeller, "competition is a sin." The "robber barons" of the new world sought to harness central government to wipe out competition, expand their interests, and bail them out in times of need; all on the backs of the American public. This desire should not be used to deride capitalism and definitely should not be considered laissez faire.
“…the mores of a more traditional organization of society do not die out with the dominance of capitalism. Rather they regroup to fight again with new leaders and new causes. Any history of capitalism must contain the shadowy history of anticapitalism, sometimes carried out in the name of a new theory, but often as a reexpression of values that prevailed before the eighteenth century.”
“…critics saw industrialization [brought about by capitalism] as a rapacious transformation engineered by an upstart upper class eager to destroy both the aristocracy and the peasantry, which had once been protected from economic turbulence.”
No doubt! Who wants either peasants or aristocrats in a modern economy? The new socioeconomic organization of capitalist economies resembled more a tomato than a pyramid, however, the foundation of the New Deal was essentially integrated by the Great Depression even before the legislation by the same name was passed through Congress in 1933.
The grand bargain was achieved. In turn for 8 hour work days, minimum wage, elections for nearly all public officials, social insurance, etc. the elite received the keys to the castle: the Federal Reserve, a public cartel of private banks, introduced plans for a fiat currency and proclaimed their members immortalis corporatus, while an income tax fed their cause and pooled massive wealth under Washington's discretion.
By dismantling the Senate and its strict allegiance to the state legislatures a centralized and seemingly endless regulatory bureaucracy arose with the powers to legislate, adjudicate, and enforce most laws and without democratic deliberation beckoned legions of lobbyists. And the grand prize, an emboldened executive, with what would become the most spectacular military in human history was proffered to carve up the world into spheres of influence under the guise of making the world safe for democracy.
Here we are over 90 years later still wrangling over similar issues: pensions, benefits, workers rights, depression/recession, and blaming it all on capitalism again while our currency is debased, we prosecute multiple foreign wars and occupy foreign lands, our benefits teeter on the brink of insolvency, while we bail out the aggressive multinational and foreign banks which wrought this travesty upon just us as they did in 1929!
All of this old baggage rehashed only to fight amongst ourselves over how to pay for it all in some apocalyptical pincer move on what is left of a middle class first created almost a century ago by ideals almost forgotten.
All of this old baggage rehashed only to fight amongst ourselves over how to pay for it all in some apocalyptical pincer move on what is left of a middle class first created almost a century ago by ideals almost forgotten.
This is the position of a mere serf and why talking about the Great Depression annoys me.
