The Great Depression doesn’t sound like fun reading. But there are uplifting reasons to look at Amity Shlaes’ recent history of the period, The Forgotten Man.
Andrew Mellon, for one. While not entirely forgotten, few people likely remember that he was in his day probably even more important than Alan Greenspan (the line goes that three presidents served under Mellon while he was Treasury Secretary). he also was quite probably the original venture capitalist, and one today’s VCs might want to emulate a little more closely. His originality and his ability to bet long with great success at a time of huge economic and social change — electrification and the emergence of broadcast media as well as the airplane were all a frenzy – make him particularly worth remembering. In addition, Shlaes shows him as behaving magnanimously towards those who tried to crush his name towards the end of his life.
For another, she attempts to pull discussion of the Great Depression away from just a focus on monetary policy. The standard line is that if the Federal Reserve hadn’t bungled by tightening credit, things would’ve been fine. But Shlaes argues that the Depression lasted far longer than it should have if monetary policy had been the only culprit. In fact, she starts her book with the forgotten Black Tuesday, the one in 1937, which showed that the New Deal was not succeeding. She instead makes a case that between Hoover and Roosevelt, government became so involved in trying to direct the economy that it in fact made it worse.
The forgotten man of her title is one who can do things without need for a government. Traditional federalists and modern libertarians will particularly like this book.
Of course, most people alive today have no memory of what small government is really like. It’s unlikely that we’ll be able to get back to it, either – the historian William McNeill argued in “The Rise of the West” that ‘the managerial elite’ tend to manage more and more things over time, becoming a self-perpetuating force not unlike the Borg. But Shlaes isn’t just being nostalgic – she’s trying to seed a new way of thinking.
The interview I did with her ran recently in Shukan Daiyamondo. Here’s how it looked as I submitted it.
Amity Shlaes Q&A
Some reviews of the book.
“A Raw Deal” in Foreign Affairs, September/October 2007
“Meddling Through” in Commentary, September 2007
“No Free Lunch” New York Times, August 26, 2007