The "Mysterious" Great Depression?

by Don Boudreaux on October 11, 2008

in Current Affairs, Financial Markets, History, Monetary Policy, Myths and Fallacies, Politics, Prices, Property Rights

This insightful op-ed by West Virginia University banking theorist and historian George Selgin (dispensing the myth of the alleged ‘mysteries’ of the Great Depression), although written more than a year ago, is especially relevant today.  Here’s a key paragraph:

Paradoxically, perhaps, the fact that orthodox economics has a good
deal to say about how the Great Depression happened itself suggests
that there is after all something puzzling about the Great Depression.
What’s puzzling is not that the depression happened, given policies
that were resorted to, but that such destructive policies secured wide
support despite their often readily-predictable, adverse consequences.
But to call even such perversity a "mystery" is to be guilty of
hyperbole. After all, politicians are rewarded for appearing to "do
something," and not for their command of "abstract" theories.


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