The Freeman 1972 - The Ludwig von Mises Institute

The American EconomyIHANS F. SENNHOLZDepression -ProofMOST contemporary economists arefully convinced that a major depressionof the 1929-1941 varietycannot happen again. It is inconceivable,they say, that the Americaneconomy should fall again intosuch an abyss of despair' whenmore than 13 million Americanswere unemployed, when banks andbusinesses failed by scores andcountless farmers lost their land,when nearly everyone sufferedpainful losses of wealth and income.The tragedy of the GreatDepression lives on as a nightmarethat frightens everyone especiallyduring periods of recession or stagnation.But our politicians andtheir learned advisors, the economists,assure us almost in unisonthat they will not let it happenagain. They are solemnly pledgingthe awesome power of governmentto prevent another depression.Dr. Sennholz heads the Department of Economicsat Grove City College. and is a . notedwriter and lecturer on monetary and economicprinciples and practices.The sincerity of their intentionsis no more to be doubted than thegood will of the policymakers ofthe Hoover and Roosevelt era whowere engulfed by the Great Depression.But it may be questioned thatwe have learned to avoid the dreadfulerrors of policy that caused andprolonged the disaster. If we repeatthe errors that generated theGreat Depression, inexorable economic.law assures that it musthappen again.Have our policymakers learnedthe lessons of the Great Depression?Their explanations and intrepretationsof economc declinediffer little from those offered bythe politicians of the 1920's and1930's.And contemporary economicpolicies, although far more comprehensiveand massive in scopeand import, are similar to thoseconducted by the Hoover andRoosevelt Administrations.Most economists echo the explanationgiven by the most famous