Did
You Hear the One About...
by Floy Lilley
by
Floy Lilley
Recently
by Floy Lilley: Sound
Money: The Impossible Dream?
Did you hear
the one about bobbing heads on Sunday agreeing that the cause of
the Great Depression was the absence of government guidance? "The
Great Depression would never have happened if there had been any
economic regulations," agreed the policy wonks.
Oh,
really?
So
you think a free society generated that monstrosity?
It
is accurate to say that in 1900 a free society did exist. The government
still approximated a minimal state, exerting minimal guidance,
and commanding minimal economic regulation. But, after 1900, virtually
all public policy proposals called for more extensive governmental
guidance.
Perhaps the
television talksters could benefit from a bit of homeschooling.
An excellent source of data is Crisis
and Leviathan: Critical Episode in the Growth of American Government
by Robert Higgs (1987). The time frame of the period up to and into
the 1920s, in other words those years before the Great Depression,
included WWI. That dramatic episode birthed government expansion
and intervention, much of which remained in regulatory force after
the generating crisis had past.
A partial list
of interventions – those government economic regulations – would
include:
- Bureau of
Corporations (1903)
- Interstate
Commerce Act major amendments (1903, 1906, 1910)
- Meat Inspection
Act (1906)
- Pure Food
and Drug Act (1906)
- Corporation
Tax (1911)
- Sixteenth
Amendment to the Constitution (1913) (Income Tax)
- Federal
Reserve System (1913)
- Clayton
Antitrust Act (1914)
- Federal
Trade Commission (1914)
- U.S. Immigration
(cut to a trickle during 1915–1920)
- Adamson
Act (1916) (railroad labor wage rates)
- Shipping
Act (1916)
- National
Defense Act (1916)
- Army Appropriations
Act (1916) (later took over railroads)
- Selective
Service Act (1917)
- Espionage
Act (1917)
- Lever Act
(1917) (food and fuel) (prohibited alcohol)
- Overman
Act (1918) (executive powers)
- War Finance
Corporation Act (1918)
- President’s
Mediation Commission (1917) (labor relations)
- Federal
Control Act (1918)
- Sedition
Act (1918)
Does this look
like a laissez-faire list?
 Higgs
summarizes just exactly how guided and regulated all economic activities
were:
The two years,
1916–1918, witnessed an enormous and wholly unprecedented intervention
of the federal government in the nation’s economic affairs. By
the time of the armistice, the government had taken over the ocean
shipping, railroad, telephone, and telegraph industries; commandeered
hundreds of manufacturing plants; entered into massive economic
enterprises on its own account in such varied departments as shipbuilding,
wheat trading, and building construction; undertaken to lend huge
sums to businesses directly or indirectly and to regulate the
private issuance of securities; established official priorities
for the use of transportation facilities, food, fuel, and many
raw materials; fixed the prices of dozens of important commodities;
intervened in hundreds of labor disputes; and conscripted millions
of men for service in the armed forces. It had, in short, extensively
distorted or wholly displaced markets, creating what some contemporaries
called war socialism.
Additionally,
Higgs documented that,
The public
debt, which had been slightly more than $1 billion before the
war, was over $25 billion at the end of the war and remained almost
$17 billion as late as 1929.
While their
heads were bobbing, my head was shaking.
This all had
to have been a joke. Right?
August
26, 2009
Floy
Lilley [send her mail]
is an adjunct faculty member at the Mises Institute. She was formerly
with the University of Texas at Austin's Chair of Free Enterprise,
and an attorney-at-law in Texas and Florida.
Copyright
© 2009 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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