Krugman's claim is evidently about macroeconomics. And I think he was
probably on to something. There was certainly a widely held, although
not universal, orthodoxy that called for balanced budgets, the gold
standard, and free international trade. Whether you consider this pure
Laissez Faire is another issue because, among other things, the
existence of a central bank that would enforce the rules of the gold
standard game was part of orthodox thinking.

But I think the Krugman claim would be wrong if extended to
micro-economics. A number of years ago I surveyed the leading U.S.
economic journals during the 1890-1930 era on issues such as wage
regulation, utility regulation, social security, and so on. You find
mostly favorable articles about regulation based on experiences at the
state level in the United States or the experiences in other countries,
and widespread support for reforms. The New Deal I concluded, was, to
some extent, just what the doctors of economics ordered.

I apologize for citing my own work, but it was in a volume that
historians of economic thought might not take a look at. Many of the
other articles in this volume, incidentally, contain discussions of the origins
of
particular New Deal policies that might be of interest to historians of
thought.

"By Way of Analogy: The Expansion of the Federal Government in the
1930s" In Michael D. Bordo, Claudia Goldin, and Eugene N. White, eds.
_The Defining Moment: The Great Depression and the American Economy in
the Twentieth Century_, 1998, 125-154.

Hugh Rockoff