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Published by EH.Net (April 2003) 
 
Parker, Randall E., _Reflections on the Great Depression_. Northampton, MA: 
Edward Elgar, 2002, xii + 230p., ISBN: 1-84064-745-0. 
 
Reviewed for EH.Net by Gene Smiley, Marquette University. 
 
The Great Depression of the 1930s was the most dramatic episode of the 
twentieth century. Many, though not all, would describe it as the "defining 
moment" of the century. It changed the conception of and the role of 
government in economies and it gave rise to modern macroeconomics. Many 
would argue that nothing was quite the same after the 1930s. But each 
passing year takes us further away from the "depression decade" and leaves 
fewer and fewer people who lived through the traumatic period. Furthermore, 
the economists who matured in and were shaped by those turbulent times are 
now the elder statesmen of the profession and are increasingly passing on. 
 
In 1997 and 1998 Randall E. Parker, an economist at East Carolina 
University who has written extensively on the Great Depression, conducted 
interviews with eleven legendary economists to obtain their reflections on 
this critical period. All of those economists were in graduate school or 
received their doctoral degrees during the 1930s. By the time the project 
was underway several of the prominent economists Parker had hoped to 
interview had passed away. These were Lester Chandler, Martin 
Bronfenbrenner, and Gottfried Haberler. Several economists that he did 
interview -- Moses Abramovitz, Albert Hart, Wassily Leontif, and Herbert 
Stein -- have passed on since his interviews. The other economists 
interviewed were Paul Samuelson, Milton Friedman, Charles Kindleberger, 
Anna Schwartz, James Tobin, Morris Adelman, and Victor Zernowitz. Some of 
these noteworthy economists have written extensively on the Great 
Depression while others have specialized on quite different economic 
issues. There are no major surprises revealed in the interviews, though the 
reader does get some insight into the personal histories of these 
economists. In his foreword, Ben Bernanke suggests that one of the 
achievements of the book is "first-rate highbrow gossip" which seems to be 
an apt description. 
 
Noting the lack of consensus on the causes, depth, and length of the Great 
Depression Parker chose to begin the volume with a chapter overviewing the 
decade. After briefly surveying the sequence of events, he examines some 
contemporary and modern explanations such as "The Monetary Hypothesis," 
"The Nonmonetary/Financial Hypothesis," and "The Gold Standard Hypothesis." 
He concludes this chapter with a brief discussion of the recovery and the 
New Deal and the emergence of Keynes and his hypotheses. 
 
The interviews provide no startling revelations or profound insights. 
Neither do they suggest that economists as different as Paul Samuelson and 
Milton Friedman have altered their long-held views on how one can explain 
the Great Depression. These eleven economists were not equally affected by 
the Great Depression and it did not always play a crucial role in their 
careers and decisions. For Samuelson the Great Depression helped lead him 
into economics, and Keynes' General Theory had a great effect on his career 
once he accepted its ideas. Milton Friedman chose economics because in the 
middle of a major depression it was a much more "urgent" field of study 
than mathematics. Interestingly, as a leading proponent of free markets and 
minimal government, Friedman notes that the New Deal was a "God-send" for 
economists because the government employed so many of them. Friedman also 
notes that if he were to rewrite "The Great Contraction" chapter from _A 
Monetary History_ he would place considerably more emphasis on France's 
role in bringing on the international depression. Anna Schwartz commented 
that she now would place less confidence in deposit insurance than she and 
Friedman did when writing the chapter on "The Great Contraction." 
 
Harvard doctoral students were among the first to preview Keynes' _The 
General Theory_ and there was a fairly rapid conversion to his views among 
the students. Moses Abramovitz reports that as graduate students and 
instructors read the galley proofs of the American version of _The General 
Theory_, they made life miserable for Harvard's professors and it was they 
who converted Alvin Hansen from a critic of Keynes to a leading Keynesian 
economist in the United States. There are many other interesting stories in 
the book, such as Albert Hart's experiences in Austria and Europe at the 
time of the  
Kreditanstalt collapse and Britain's exit from the gold standard. 
 
Inevitably in a set of interviews such as these, the quality, length, and 
topics discussed will vary considerably between interviews. To control for 
this Parker asked similar questions of most of the economists interviewed. 
These questions included: What ended the Great Depression?  Does the memory 
of the Great Depression stay with you today?  Could it happen again?  What 
was the role of the Great Depression in shaping your thinking and career?  
What are the lessons of the Great Depression? Are there parallels between 
the depression of 1920-1921 and 1929-1933?  Other questions such as, should 
the Fed be an arbiter of security prices, do the trends in the distribution 
of income bother you, did the depression change the psychology of the 
country, and did Keynes have "saving capitalism" as an objective in writing 
_The General Theory_, were asked of several of the interviewees. 
 
Though the answers to these questions varied there were some common 
responses. Most concluded that World War II brought us out of the 
depression decade. However, Friedman suggested that it was the Fed's 
printing of money to finance government armament expenditures that did so 
-- not simply the government spending. Anna Schwartz mentioned the growth 
of the money supply up to the depression of 1937-1938 and never mentioned 
World War II. None of the economists interviewed thought that a repeat of 
the Great Depression was much of a possibility, though most did not rule 
out the possibility completely. James Tobin thought that a repeat was 
unlikely but noted that recent events in Japan had shaken his confidence in 
such a conclusion. 
 
This is an interesting and well-written book. It provides additional 
insights into the thinking and personalities of some of the leading 
economists who came out of the most depressed decade in modern times. It 
provides additional reading for study in both economic history and the 
history of economic analysis, and I heartily recommend it. 
 
 
Gene Smiley is a professor of economics at Marquette University. His most 
recent book is _Rethinking the Great Depression: A New View of Its Causes 
and Consequences_ (2002). 
 
 
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