The prolific and always-insightful Andy Morriss — who co-blogs with me at Market Correction — sent this letter several days ago to the Wall Street Journal:
Morial and Janet Murguia begin by repeating the canard that “FDR’s
New Deal helped lift the country out of the Great Depression.” (April
29). This has been debunked repeatedly, including in reviews in your own paper of
Amity Shlaes’ The Forgotten Man. Not content to rewrite history, the
two authors next assert that the stimulus bill was enacted “to boost
economic growth.” Your own paper has documented that (a) neither the vast
majority of Congress nor the Administration had any idea of what was in the
massive stimulus bill, making their intentions irrelevant and (b) it was a special
interest feeding frenzy, redistributing wealth from our children to those whose
lobbyists managed to claim them a share. When I want to read historical fiction,
I head for the library. When I want to read contemporary political fantasies,
the New York Times is readily available. I appreciate the Journal’s
commitment to a diverse set of view points, but it would be better served
by limiting contributions to those that reflect a clearer understanding of
history and politics.
Professor, Institute for Government and Public Affairs
University of Illinois
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{ 31 comments }
Oh, tsk tsk, Andy expects news in a newspaper? Factual reporting? How passe.
"Debunked repeatedly"????
I think he's over-stating his case a little! Some people assume the New Deal did more than it really did, but the idea that the New Deal helped has been "debunked" or even the line that the New Deal made the Depression worse is pure fantasy.
We'll never know exactly what would have happened in the absence of the New Deal because there's no counterfactual available to us. But that doesn't mean you can go around citing:
1. Shlaes, and
2. WSJ reviews of Shlaes
And think you've made some sort of air-tight case. Even if you throw in Burton Folsom for good measure, it's still falls far short of making that case.
Is there more room for disagreement on the New Deal than some Democrats will admit today? I'll completely accept that. But this historical revisionism that's so popular these days that says the New Deal didn't help or made the Depression worse is truly, truly disturbing to me. It's like Soviet textbooks – putting ideology over what we actually know about history.
Morriss's last line: " I appreciate the Journal’s commitment to a diverse set of view points, but it would be better served by limiting contributions to those that reflect a clearer understanding of history and politics" – is deliciously ironic.
One wonders how a Keynesian with a BA in English would be received here.
Well said, especially the part about fiction. The big lie when repeated over decades becomes the truth.
Enjoyed theletter but agree with Mr Kuehn above that the anti-New Deal argument is overstated relative to the evidence.
History shows that the New Deal was a feature of a very prolonged depression, beginning in the Hoover administration and lasting until after WWII.
Under the New Deal, massive quantities of agricultural resources were destroyed.
How could such policies have mitigated the depression in any regard?
If there is any unassailable logic, it is that the destruction of product and resources makes people poorer.
Sam -
I'm not a big fan of agricultural subsidies – but I hope you're not judging the entire New Deal by those programs!
Daniel -
If arguing that the New Deal and FDR were failures in dealing with the Depression constitutes 'putting ideology over what we actually know about history,' then arguing that the New Deal was a success is also 'putting ideology over what we actually know about history.'
Will -
I'd put people who think FDR could do no wrong and that the New Deal was a stunning success into that "ideology over fact" camp, certainly.
Look – the New Deal obviously had some effect – positive, negative, or imperceptibly small. Drawing a conclusion on that question by engaging the facts is fine. But there has been a tendancy lately to bandy around Shlaes despite some huge flaws that people have pointed out in her analysis, and assume that FDR has been "debunked", as the letter to the editor said. Even if we give Shlaes a seat at the table of this discussion – which we should, because she has some good points – you don't cite her and say that the case is closed and FDR is debunked!
Where has the evidence consistently come down on the New Deal? That some things really weren't helpful, but overall it provided a boost, but that we didn't really get out of the Depression until mobilization broke the deflationary spiral. That's where the evidence has been pointing – independent of ideology.
If the New Deal worked, it would not just contradict a few economists' views on the 1930s, but would overturn pretty much everything we thought we knew about economics.
That may seem over the top, but it really isn't. According to basic economic logic, the New Deal's programs just should not have worked. Therefore, if the New Deal worked, then basic economic logic is all wrong, the world is topsy turvy, debt is saving, poverty is prosperity, and muirgeo can comprehend this post.
Lee Kelly -
Only if you define Keynes out of "basic economic logic". I have no doubt you do.
If the New Deal worked outside of the special case of a deflationary spiral, that would truly overturn some basic economic logic.
RE: "debt is saving, poverty is prosperity"
More orwell from you, huh? Sort of like commerce doesn't include credit and general means specific (check out the "resistance is futile" post for those of you who are confused by that reference)?
Daniel,
I suppose you think there was something clever in your comment above.
Given my understanding of the New Deal's economic policies, it would be inconsistent of me to accept the New Deal worked and basic economics simultaneously. The same is, of course, true of "Keynesianism", since most of my arguments against it proceed from basic assumptions about economics.
If I thought the New Deal worked, then I might go collect everything I own into a big pile and burn it.
Lee Kelly -
That's exactly my point!!!! Only in this bizarre, Cafe Hayek universe is Keynes not included in "basic economic logic". Even where some Keynesian points are still fought out, he's still considered one of the "basics".
I think here the point can again be brought back to the "Is Resistance Futile?" conversation. Just as all constitutional scholars in disagreement with a particular interpretation in constitutional law become "imbeciles" and "liars" to you, so any recognition of Keynesian arguments disqualifies one from "basic economics".
Fine and dandy, if that's your taxonomy. But just realize that this isn't how scholarly inquiry works. You're in the realm of political ideology, which is perfectly fine, but it is neither economics, jurisprudence, or any other scientific discipline that doesn't have an interpretive litmus test.
Brilliant Evan! I feel like I've known you from birth!
(spoiler alert… I have known him from birth)
Daniel,
I have not read any of Keynes' work, and neither do I intend to, because there are hundreds of economists I would rather read first. What is often called "Keynesianism" might have nothing to do with Keynes for all I know. But since I think that "Keynesianism" is mostly nonsense, why would I wish to incorporate it into my understanding of economics? I explicitly reject it.
You can personally reject it. That's fine. I'm not saying all "basic economics" has to be agreed to. But you oughta recognize Keynes as one of the cornerstones of economic logic. It's a shame if you don't.
Evan,
Well if modern constitutional law and "Keynesianism" are examples of "scholarly inquiry", then your can keep it for yourself. I'll happily be an "ideologue" if it means pointing out that the emperor has no clothes on. My hunch is that anyone who disagrees with you too strongly will be tarred with the same brush. Your notion of "scientific discipline" means nothing to me.
Evan,
Considering some "interpretations" of the constitution, a lot of justices and scholars are either imbeciles or liars–there is no other credible possibility.
Call that notion "ideology" if you wish to besmirch it, but if that is ideology to you, then I take your comment as a compliment.
Lee Kelly, I don't intend to speak of ideology in a demeaning sense; there's nothing wrong with it in itself, but it's simply different from non-ideological inquiry. I take it that ideological inquiry insists upon particular interpretations or stances while scholarly inquiry is not exclusive on this level; what scholarly inquiry insists upon is methodological rigor, whatever interpretations or stances result from that.
This doesn't mean that ideologies are untrue or even non-rigorous. But they're sectarian in that sense, and they tend not to benefit as extensively from the interchange of ideas present in the marketplace of scholarly inquiry.
So "non-ideological inquiry" is not exclusive with regard to "particular interpretations or stances", and insists upon "methodological rigour"?
Sorry, but I really do not think scholarly inquiry has much methodological rigour, and I say that as someone who is primarily occupied with issues of methodology, epistemology, and logic. There are more methods out there, and more standards by which they are judged, than there are fields of inquiry–economics is particularly bad for this.
And as for non-exclusivity with regard to "particular interpretations and stances", I am not sure what you mean. If you are simply referring to a general open-mindedness, then, as an absolute sceptic, I think my philosophy is more open-minded than yours. Nonetheless, I do tentatively think some ideas are true, or at least better than the alternatives. The mere fact that I hold them tentatively does not mean I wish to express them tentatively.
"And as for non-exclusivity with regard to "particular interpretations and stances", I am not sure what you mean."
The question was of whether something was "economics" or "constitutional law"… disciplines, not personal stances. You can be as tentative, skeptical, or decided as you want as a particular scholar. What gets silly is when you say that those in disagreement most be "liars" or in contradiction with "basic economics", when in fact they represent a significant portion of their respective fields.
Sam -
I'm not a big fan of agricultural subsidies – but I hope you're not judging the entire New Deal by those programs!
As the New Deal was such a mish mash of policies, programs, etc. how are we to judge which produced what result?
As the New Deal was implemented by one agency, should not one obvious (and tremendous) stupidity give us a hint as to the nature of the source?
Obviously, whoever wrought agricultural policy during the New Deal had no clue as to economic fundamentals.
Lee Kelly -
RE: "Sorry, but I really do not think scholarly inquiry has much methodological rigour"
Pssh! What do you know about methodological rigor? You can't even spell "rigor" right!
Joke! Joke! I know you're British! Don't bite my head off over that!
Lee Kelly -
RE: "I am not sure what you mean. If you are simply referring to a general open-mindedness, then, as an absolute sceptic, I think my philosophy is more open-minded than yours."
You??? A skeptic??? Have you been reading your own posts on the U.S. Constitution? You don't bring a skeptical eye to anything! It's you're way or the highway! There's no gray – no ambiguity. I'd hardly call that a skeptic's perspective!
RE: "Obviously, whoever wrought agricultural policy during the New Deal had no clue as to economic fundamentals."
I would generally agree with that. I think they had a clue about microeconomic fundamentals. The goal was to help farmers specifically in the short run, which it did (it's hard to hand money to people and NOT help them in the short run)! I think the point is that was (and is) very unsound macroeconomic policy, and it doesn't help non-farmers at all. So do they misunderstand basic economics? Maybe, maybe not. One thing we can conclude – if they DID understand economics, they used it to help farmers and not the broader public.
The New Deal is a hodge podge. It's not easy to evaluate the whole thing together. I still don't think it's very genuine to evaluate it on the basis of a giveaway to a single constituency.
It reveals the political nature of government intrusions into the economy.
We have also been paying for these agricultural policies ever since.
What has been the total cost?
Which New Deal policies would you suggest were helpful overall, I mean aside from re-expansion of the money supply (which had been contracted by the FED)?
Sam -
I actually wish I knew a lot more about the New Deal than I did. I've only started reading up on it in the last year – when people started to make Depression parallels. Most of the history I read before that was from the revolutionary and early republic period.
However – I'd highlight the WPA, rural electrification, the TVA, the NYA, etc as being especially helpful (at least that's what "basic economic theory" would highlight as being the most helpful). Obviously there were big problems as well – agricultural subsidies (which I'd emphasize probably hurt more in the long term than the short term), the NRA, etc. Nobody's arguing that the New Deal was a panacea. But the idea that it was terrible for the country is historical revisionism.
Then there's banking reform, which I certainly think helped the economy… I think that's somewhat separate from the broader "New Deal", though.
I think it's important to note that Roosevelt's administration didn't REALLY understand what Keynes was saying (and a lot of the New Deal was implemented before Keynes even said it!). So the New Deal is hardly a perfect test of Keynes, and it was largely haphazard because it didn't have a unified understanding of exactly what the New Deal was intended to accomplish.
Wow. Only my second time here, but I'll say the argument between Daniel and Lee is entertaining. This country is full of think tanks and pundits spouting off like Lee does with arguments that sound convincing to people who have just enough education on a subject to be dangerous.
Oooh – I like you Vaish!
Please come back!
I don't post as often as I did a couple weeks ago, but this round has been fun, yes.
Vaish,
To be an enemy of some people is a compliment, but you flatter me unduly by calling me dangerous.
It is my sincere hope never to be as "educated" as Daniel or yourself.
Being a sceptic is not about pussyfooting around, or only timidly adopting a position, but being ready to test a position to its fullest. And neither does it mean that one should suffer fools.
To qualify my every comment with doubt would be needless verbiage. I repudiate even modern forms of scepticism for not being sceptical enough.