Defying Depression Stereotypes - Pacific Research Institute

Defying Depression Stereotypes

Readers will recall that, in September, the Contrarian reviewed The Forgotten Man, by Amity Shlaes, a history of the Depression that charts the massive growth in government dating from the New Deal. For that reason alone we considered Amity’s book a valuable work, and quite suitable for “women’s studies,” as well as a thoughtful holiday gift.

As one might expect, The Forgotten Man proved of great interest to economists and historians, but the book also prompted a long review from novelist John Updike in The New Yorker. Mr. Updike notes at the outset that those who actually experienced the Great Depression are dying off. That leaves us in dangerous times, the novelist warns, when the subject passes into the hands of writers such as Amity Shlaes, whom he tags as a revisionist. He particularly dislikes her story line that the 1920s were a time of growth, when faith in laissez-faire capitalism was justified. He also dislikes her view that government inaction is generally a beneficial thing.

The novelist spent a lot of time on various episodes in The Forgotten Man, which he found hard to follow. So is his review, which makes it clear that, for Mr. Updike, this is personal. “The Depression was a good time in which to be a sheltered only child,” he explains. Like many others, his father and grandfather had taken economic hits at the time but got help from some New Deal programs. Near the end, he sums it up.

“Business, of which Shlaes is so solicitous, is basically merciless, geared to maximize profit. Government is ultimately a human transaction, and Roosevelt put a cheerful, defiant, caring face on government at a time when faith in democracy was ebbing throughout the World.” For that Mr. Updike proclaims Roosevelt the greatest president of the 20th century, but consider the implications of the rest.

Unlike Mr. Updike, I did not live through the Depression, nor World War II, but I do know that it was the government, not Macy’s, that decided to take American citizens of Japanese descent out of their homes and put them into internment camps. It may surprise some to learn that the government of Canada did likewise.

It was the government, not Sears, which conducted other draconian moves during the 1930s, such as the destruction of livestock in order to rig prices. No business has the power to launch what Mr. Updike calls “virtually unrestricted conscription” and send Americans to the front lines, where many perished. Only government could do that. It was also the government that “dizzyingly raised taxes,” as Mr. Updike put it. That took more money out of people’s pockets.

Businesses can’t raise taxes or destroy people’s property with impunity. Certainly businesses are geared to profit, but no business can afford to act in a “merciless” manner, otherwise consumers will simply take their business elsewhere. During the Depression or in current times, a business can only be profitable by providing the goods and services that people want to buy in an open market. At the moment, the market is very competitive, even in literature. Many people want to buy the novels of John Updike, which enables his publisher to be profitable, one would hope without being merciless. According to stereotype, one might expect a woman to write a more sentimental account of the Depression and a man to be more calculating and scholarly. Here the personal, sentimental approach belongs to John Updike, and Amity Shlaes provides the objective treatment that is certainly more economically sound. Lots of people want to buy her books too, and I hope she writes another one soon.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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