The Surprising Answer for How to Handle The Next Recession
When economic troubles strike, policymakers are eager to do something to try to help the citizenry. But Prof. Lawrence H. White argues that government doesn’t necessarily know how to relieve economic woes, and in fact, often wastes and mismanages resources. Individuals in the market know better what they need in their circumstances, as economist Friedrich Hayek argued during the Great Depression. Relying on government to fix our economic woes instead of allowing individuals to make decisions for themselves means putting all of our eggs in one basket. Individual decisions in the market won’t be mistake-free, but each individual mistake will be smaller and will correct more quickly. The unusually slow and painful recovery that we have seen in this recession point to problems with the “government should do something” view. What do you think might be the best way to handle economic difficulties? Why?
Higgs on the Great Depression [podcast]: Russ Roberts sits down with Robert Higgs to discuss how New Deal policies had created uncertainty in the economy rather than help create stability
Nye on the Great Depression, Political Economy, and the Evolution of the State [podcast]: Russ Roberts sits down with John Nye of George Mason University to discuss why support for free market policies is so unpopular during crises
World War II Spending Did Not End the Great Depression [article]: Sheldon Richman from Reason Magazine discusses why aggregate statistics fail to prove that WWII ended The Great Depression
Great Myths of the Great Depression [PDF/ Audio] Lawrence W. Reed, President of FEE, confronts the many myths of The Great Depression and explains the often confusing history of policies leading up to the crash
The Clash of Economic Ideas [book]: Lawrence H. White’s book on how contrasting economic ideas have originated and developed over time to take their present forms
“Money For Productive Investment” vs. “Spending and Saving” [newspaper]: Primary newspaper clippings of Keynes and Hayek’s arguments on spending, savings, and government intervention as the Great Depression was playing out