----------------- HES POSTING ----------------- 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). Copyright ® 2003 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ([log in to unmask]; 513-529-2850; Fax: 513-529-3308). Published by EH.Net (April 2003). 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