The Great Depression: America, 1929–1941
The Great Depression: America, 1929–1941 () is a 1984 history of the Great Depression by acclaimed historian Robert S. McElvaine. In this interpretive history, McElvaine discusses the causes and the results of the worst depression in American history, covering the time from 1929 to 1941. He examines the causes of this cataclysmic event, its impact upon the American people, and the political, governmental, and cultural responses to it. He comes down firmly in favor of the "demand-side" argument that maldistribution of income in the 1920s having left the bulk of potential consumers with too small a share of national income to buy all that mass production was putting on the market was the principal cause of the collapse. Building on his innovative use of letters written by "ordinary" Americans during the Depression that were collected in his first book, "Down and Out in the Great Depression", McElvaine takes readers into the experience of Depression victims to an extent never before achieved.
Causes of the Great Depression
Friedrich Hayek had criticised the FED and the Bank of England in the 1930s for not taking a more contractionary stance. However, in 1975, Hayek admitted that he made a mistake in the 1930s in not opposing the Central Bank's deflationary policy and stated the reason why he had been ambivalent: "At that time I believed that a process of deflation of some short duration might break the rigidity of wages which I thought was incompatible with a functioning economy. In 1978, he made it clear that he agreed with the point of view of the Monetarists, saying, "I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy", and that he was as opposed to deflation as he was to inflation. Concordantly, economist Lawrence White argues that the business cycle theory of Hayek is inconsistent with a monetary policy which permits a severe contraction of the money supply.