A Misesian commentary from a Hillsdale economics professor makes its way into the Detroit News:
Ludwig von Mises foresaw the Great Depression not because of particular economic policies, but because he observed a movement away from the belief in market capitalism and limited government toward interventionism and expanded government. This was reflected in the progressive movement and found its great flowering in the Franklin Roosevelt administration.
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Is that true? I thought he foresaw the depression as a result of the expansive monetary supply with the inevitable resulting burst of the bubble.
The move away from free market capitalism prolonged the depression and made the impact of the bursting bubble worse.
Wuzacon,
I think that the big governement that Mises is talking about her is the creation of the federal reserve. This (albiet not explicit) counter cyclical monteary policy, caused the massive credit expansion during the 1920s. This credit expansion was fuled by governement intervention.
This intervention, allowed for the progressive fiscal, and social policies of the 1930′s and 40′s under President Roosevelt. The High Wage policies, make work pay programs, smoot Hawley tarrif, and other protectionist schemes, distroyed the markets ability to self equliberate by providing subsidies for failing industries ect.
Hoover started the whole thing trying to keep prices from falling, making consumers better off. Well prices fell with mounting inflation. Then that bozo signed the Smoot-Hawley tariff causing complete mayhem in the allocation of resources across the globe in a giant tit for tat trade war.
As miserable as the result in the US was, in Europe and Japan it was worse. It really set the stage for the continued increase in power of the Fascists in Germany and the militarists in Japan.
Sorry, I meant to say “making consumers worse off”
I think the author understands the complete Mises view. The sentence is just a quick summary, and indeed, I think it refers to the Federal Reserve, among other things.
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