Toward The Great Cleansing

Chapter 1 (Part 3 of 4) of the book

The Discovery of First Principles, Volume 3

Edward J. Dodson

Social Democracy and the Mixed Economy

When the U.S. stock market crashed in October 1929 the one person in a position to intervene was the first-term Governor of the State of New York, Franklin Delano Roosevelt. He had been in office since January, embarking on a moderate program that included prison reform and establishment of old age pensions. In August he also declared his support for a government-controlled system of unemployment insurance. He also championed the right of workers to organize for collective bargaining. He opposed providing government guarantees to depositors in banks or the imposition of heavy regulation on the banks. Regulation of the utilities -- industries Roosevelt thought were inherently monopolistic -- became an important exception in his vision of the mixed economy. Aristocratic, wealthy, highly educated, patrician, groomed for public service but without a strong ideological vision, Roosevelt practiced compromise and conciliation in order to get things accomplished. He held great faith in the underlying strength of the republic and in the spirit of the people of the United States. Roosevelt biographer Ted Morgan writes of him:

There were no isolated events for Roosevelt. Everything that happened in the state and the nation, every crisis, every decision taken, was part of a larger context of America fulfilling its destiny, of an experiment in government still being worked out.[67]

That experiment was now subjected to the pressures of spreading bank failures, rising unemployment, business and personal bankruptcies and social unrest. The question facing Roosevelt and other high public officials was in what ways government ought to provide relief and intervene to stimulate economic activity.

By the middle of 1930, and despite worrisome signs in the rural heartland, Herbert Hoover was publicly declaring the depression had come to an end. Expressions of public optimism were in line with Hoover's perceived duty to provide psychological nourishment in lieu of real help from government. Despite his public utterances, however, Hoover was no fool; he understood full well that the disappearance of income (and purchasing power) for millions of citizens meant that businesses were not going to expand production unless and until the demand for goods showed signs of increasing. Unfortunately, just the opposite occurred. That winter unemployment reached one quarter of the work force. Antagonism toward Hoover and the Republican party opened the door for the Democratic party, as much out of mass desperation as from any confidence that the Democrats would actually do much to improve conditions. Among the Democrats, Franklin Roosevelt was far and away the one public official who aggressively attempted to use the powers of state government to mitigate the impact of the depression. At the same time, Roosevelt began to publicly express his own views on important socio-political questions. Speaking to the state legislature in 1931, he asked rhetorically, "What is the state?":

It is the duly constituted representation of an organized society of human beings, created by them for their mutual protection and well-being. 'The State' or 'the Government' is but the machinery through which such mutual aid and protection are achieved. ...In broad terms, I assert that modern society, acting through its government, owes the definite obligation to prevent the starvation or the dire want of any of its fellow men and women who try to maintain themselves but cannot.[68]

This was sentiment as much as penetrating socio-philosophical thought, but his words suggested that individuals living together within a societal framework had a responsibility to care for one another. What was heartening to many and troublesome to those who had long enjoyed great privilege was the fact that Roosevelt seemed to have broad appeal across the nation. As chief executive for the State of New York, he demonstrated a determination to deal with problems and issues that surprised all but those closest to him. Democratic party stalwarts in other states took notice, as did the millions of citizens suffering under the weight of the Depression.

Roosevelt pushed for and got a large increase in the state income tax, which was the most direct way he knew of to achieve a meaningful redistribution of purchasing power. He brought in Harry Hopkins to head the state's Temporary Emergency Relief Administration. Advice came from many directions, including Felix Frankfurter; and, once he declared for the Presidency, Roosevelt openly sought input from a group of academicians led by Columbia University political science professor Raymond Moley.[69] This small group of advisers became known as Roosevelt's "brain trust." Moley recruited two economics professors from Columbia to develop policy. Rexford Tugwell provided expertise on agriculture, and Adolf A. Berle, Jr. dealt with monetary policy. Remarkably, neither Tugwell nor Berle were Roosevelt supporters, but they welcomed the opportunity to advise the Governor. Both Tugwell and Berle had become strong proponents of central planning and regulated markets.

Roosevelt now had a reasonably cohesive plan with which to attack the Depression. All that remained was to gain his party's nomination and take the Presidency away from Hoover. The Democrats rather quickly united behind Roosevelt, who accepted the nomination with a promise of a New Deal for the citizens of the nation. Hoover then blundered by calling out the military against the so-called bonus army of war veterans encamped along the Anacostia River in Maryland. The image of General Douglas MacArthur's tanks and cavalry attacking unarmed men who had earlier in their lives served their government in Europe was a national disgrace Hoover could not easily rationalize to a nation of unemployed and hungry people. All through the summer months Roosevelt planned his campaign and in September set off on a journey across the country. The President-in-making observed in the United States an unexpected depth of apathy. Despite the suffering, those who called for a Bolshevik or Fascist-style takeover attracted few supporters. Among those searching for new ideas, social democracy and the mixed economy, central planning and coordination of wealth production seemed like sensible responses to an economic system shown to be incapable of self-regulation. As they pondered such choices, John Maynard Keynes (in the pages of The Atlantic) raised the stakes. While most of his colleagues patiently waited for the markets to find a new equilibrium, Keynes challenged them to respond to the global crisis: "Can we prevent an almost complete collapse of the financial structure of modern capitalism?"[70] asked Keynes. If Keynes had been an eccentric or some obscure college professor, he could have been ignored. Trouble was, he was raising questions few other economists wanted to be raised. In the face of the real world problems staring at them, they had few recommendations to make.

Keynes, on the other hand, pointed out the obvious and explained that the behavior of individuals, individual businesses and even individual governments all seemed appropriate and beneficial in isolation. Unfortunately, taken in the aggregate there was a tremendous "disharmony of general and particular interest."[71] The nations of the world were locked in an embrace from which there was no escape, he warned. The time had come for the leaders of individual nations to begin to work together for the common good:

Each nation, in an effort to improve its relative position, takes measures injurious to the absolute prosperity of its neighbors; and, since its example is not confined to itself, it suffers more from similar action by its neighbors than it gains by such action itself. Practically all the remedies popularly advocated to-day are of this internecine character. Competitive wage reductions, competitive tariffs, competitive liquidation of foreign assets, competitive currency deflations, competitive economy campaigns -- all are of this beggar-my-neighbor description. ...

...[T]hrough lack of foresight and constructive imagination the financial and political authorities of the world have lacked the courage or the conviction at each stage of the decline to apply the available remedies in sufficiently drastic doses; and by now they have allowed the collapse to reach a point where the whole system may have lost its resiliency and its capacity for a rebound.[72]

There was no time to lose. Keynes urged the French to reach a final settlement on reparations with the Germans. He applauded Britain's departure from the unworkable gold exchange system as a positive step in halting global deflation. He predicted that France, and eventually the United States, would suffer the consequences of maintaining a fixed exchange rate for the franc and the dollar against sterling and other currencies no longer tied to gold. And, finally, he urged governments to use their spending powers to stimulate production and consumption. Yet, he was not optimistic that the measures he viewed as nothing more than common sense would be taken. "In the United States," he closed, "it is almost inconceivable what rubbish a public man has to utter to-day if he is to keep respectable."[73]

For rather different reasons, Harry Gunnison Brown largely agreed with the assessment Keynes offered of the political decision-making process. In the Spring of 1933, an article by Brown appeared in the Beta Gamma Sigma Exchange attacking most of the proposals then being made as integral to a recovery and (agreeing with Keynes) suggested that the time had come to abandon the gold exchange system, writing: "L[I]t would be better to stabilize the general price level by open market purchases and sales of eligible securities as well as gold and not be dependent upon any need to interfere with the importation and exportation of gold."[74] Today, gold is freely bought and sold just as any other commodity. Currencies find their exchange rates based on market forces and how markets react to government and central bank actions. A certain degree of monetary instability is inherent in a system dependent upon the exchange of numerous currencies. However, I would argue that the degree of instability would be infinitely less if paper currency represented a claim on a specific basket of goods. Readers will recall the period during which the Bank of Amsterdam served as a bank of deposit and as an issuer of coinage trusted to contain a standard ratio of gold and silver. There was virtually no possibility during the early years of the global depression of creating a single currency attached to a system of deposit banks. Each government was, as Keynes wrote, concerned only with its own survival.

In the United States, at least, there was to be new leadership and a push for experimentation. Franklin D. Roosevelt had been elected by a margin of over 7 million votes -- an extraordinary mandate to do whatever was reasonably necessary to restore vitality to the republic. Roosevelt demonstrated he was prepared to make decisions on the run. He picked up from where Hoover left off and helped to move the nation along a path the end of which brought the two main national political parties rather closer together. The formation of majority coalitions frequently crossing party lines to advance or thwart particular legislation established the outward boundaries of Roosevelt liberalism. Too much movement in the direction of regulation and central planning was opposed by proponents of the existing order. At the same time, the continued protection of so many forms of privilege and weak enforcement of laws against criminal license prevented movement toward a truly just society. Justice could not prevail when behavior outside the realm of liberty were encouraged, on the one hand, while those legitimately within the realm of liberty were simultaneously thwarted. What the New Deal succeeded in doing was to check the advance of more radical ideas in favor of incremental changes to the status quo. Under the circumstances, those who controlled most of the nation's wealth had much about which to feel comforted. With so much at stake, Roosevelt's first inaugural address was surprisingly brief, remembered primarily for his bold assertion: "…the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."[75] The message delivered, Roosevelt and his New Dealers went to work.

With the help of Raymond Moley, Roosevelt began to build his administration from the top down. His key cabinet appointments included the Iowan Henry Wallace (Agriculture), Tennessee Senator Cordell Hull (State), Frances Perkins (Labor), industrialist William H. Woodin (Treasury), Harold Ickes (Interior) and the trust-busting progressive, Senator Thomas J. Walsh (Attorney-General). Roosevelt brought his cabinet members together the day after the inauguration and got them off to a running start. First on the President's list of priorities was to take action in response to the collapse of the banking system. Nearly 2,300 banks had failed in 1931, and another 1,400 failed banks were added to the list during 1932. Government loans slowed the closings, and a number of state and municipal governments declared bank holidays or restricted withdrawals. A major problem for the banks was the inability to raise cash by the sale of corporate bonds they held as assets without taking significant losses. Moreover, increasing numbers of loans made to real estate developers defaulted. Most of the properties acquired by foreclosure were then resold by the banks at half their acquisition and construction cost (or less). All across the nation millions of homeowners were no longer making payments on mortgage loans. Large numbers of businesses were in about the same financial condition. Depositors withdrew their cash from any bank even suspected of weakness and either transferred their accounts to other banks or withdrew the currency from circulation. On the eve of Roosevelt's inauguration, the Federal Reserve Board was urging Hoover to declare a national banking holiday. Hoover sought Roosevelt's agreement before acting but could get no reply and so did nothing. Instead, the state governors of New York, New Jersey, Pennsylvania, Massachusetts and Illinois took action to close the banks, and virtually every other state followed. Upon taking office, Roosevelt filled the vacuum at the Federal level by declaring a three-day holiday beginning March 6. At the same time, he took the United States off the gold exchange standard. Keynes, Harry Gunnison Brown and their colleagues then waited to see what more Roosevelt agreed had to be done.

Roosevelt was ready to put his mandate -- and the Democratic party's majority in the Congress -- to the test. The Republicans knew that the era of laissez-faire was ending and, for a time, rallied to the cause of national unity. Roosevelt had certainly benefited by his association with the academics pulled together by Raymond Moley. Still, there was in the New Deal no cohesive plan. Moley would later recall that what emerged was "a loose collection of many ideas -- some new, most borrowed from the past -- with plenty of improvisations and compromises."[76] Ted Morgan adds that "the first law of the New Deal" was "the Law of Unintended Consequences."[77] The attack proceeded along a broad front. The banking crisis had to be dealt with immediately, and the approach taken shifted the impetus for legislation from the Congress to the Executive. A new law was quickly prepared and passed prohibiting the exporting of gold and requiring private holders to sell their gold to the Federal Reserve Banks at a fixed price of $20.67 an ounce. Holders of U.S. currency were left with few choices. They could continue to hold currency without interest, redeposit these reserves back with the surviving banks or invest in corporate stocks and bonds the values of which were still falling.

For reasons that were as much psychological as pragmatic, Roosevelt introduced an across-the-board reduction in the salaries of Federal employees. Then, in the face of strong objections raised by General Douglas MacArthur, military expenditures were cut by more than $200 million. A new Civilian Conservation Corp. almost immediately began to put people to work on public lands. The wealthier farmers and agribusinesses in general received a considerable measure of Federal subsidy in May with the passage of the Agricultural Adjustment Act, which introduced the practice of paying farmers to leave acreage idle to prevent overproduction. Next came the Federal Emergency Relief Administration and the Tennessee Valley Authority. A new Federal Deposit Insurance Corporation was created under the Glass-Steagall Banking Act, which also prohibited commercial banks from engaging in the financing of stock purchases. The Wagner Act guaranteed the rights of workers to organize for purposes of collective bargaining. Although the detailed record of meetings and decisions reached during these first months verifies Raymond Moley's assessment, there is also a strong case to be made for Frank Freidel's conclusion that "[t]he New Deal ... completely abandoned the laissez-faire tradition" [and] "attempted to manage the business cycle."[78] Certainly, Roosevelt's initiatives created a window of opportunity for Adolf Berle, Rexford Tugwell and others to advance the case for more direct central planning.

Somehow during this first year, the President found time to put together his own account of this flurry of activity, published in 1934 under the title On Our Way. He had come to realize that the end of laissez-faire had been long overdue:

The almost complete collapse of the American economic system that marked the beginning of my administration called for the tearing down of many unsound structures, the adoption of new methods and a rebuilding from the bottom up.

Three steps, all interrelated, were necessary: first, by drastic measures to eliminate special privilege in the control of the old economic and social structure by a numerically very small but very powerful group of individuals so set in authority that they dominated business and banking and government itself; second, to war on crime and graft and to build up moral values; and third, to seek a return of the swing of the pendulum, which for three generations had been sweeping toward a constantly increasing concentration of wealth in fewer and fewer hands -- a swing back in the direction of a wider distribution of wealth and property of the nation.[79]

Raymond Moley was no stranger to the writings of Henry George or to the potential for the adoption of George's proposals to stimulate the results Roosevelt stated he wanted to achieve.[80] Yet, Moley describes his own knowledge of economic matters as rudimentary, so much so that he was reluctant to advise the President on matters better left to Berle and Tugwell. When Roosevelt wrote, "[t]he time called for and still calls for planning," he seemed to be giving the proposals of these two economists broad support. What is perhaps fair to say is that Berle and Tugwell reinforced Roosevelt's own sense of what had to be done, which was to get income flowing into the hands of consumers so that demand (and production) would begin to create a counter-cyclical movement. The question was how to accomplish this objective. Even had Moley advanced ideas learned from Henry George, the political obstacles for their adoption would have been enormous. There is no evidence I have been able to locate that Moley made such an attempt.

Tariffs and other restrictions on trade deepened and prolonged the Depression. Across the Atlantic, British voters abandoned Labour in favor of the Conservatives and abandoned free trade in a desperate attempt to protect a dwindling employment base. A third of Germany's work force was idle, and after a succession of governments came and went Adolf Hitler was reluctantly called upon by the aged President, Paul von Hindenburg, to take over the job of Chancellor. Not long thereafter, Germany broke off disarmament negotiations and withdrew from the League of Nations. In France, power changed hands frequently as successive governments proved incapable of effective leadership. Mussolini was firmly entrenched in Italy and was set to embark on an imperialistic invasion of Ethiopia in 1935. On the Pacific rim, land hunger and economic hardship had combined to thrust the Japanese into the imperialist arena at the expense of the people living in Manchuria. Participatory government and transnational values were almost everywhere in retreat. Paul Johnson observes that by mid-decade, "many intelligent people believed that fascism was likely to become the predominant system of government in Europe and perhaps throughout the world." They had good reason, as Johnson describes:

There were quasi-fascist regimes in Germany, Italy, Spain, Portugal, Poland, Hungary, Austria, Turkey, Greece, Romania, Japan and many others states; and flourishing fascist parties virtually everywhere else.[83]

Representatives from these fascist states and the social democracies came together in 1932 to discuss disarmament, but it soon became clear to even the most ardent pacifists that the major nations were headed toward conflagration. Albert Einstein, brought by the transnationals to Geneva in a desperate attempt to stimulate a united transnational reaction to the war fever, sensed that time was running out. "One does not make wars less likely to occur by formulating rules of warfare," Einstein lamented. "One must start with the unqualified determination to settle international disputes by way of arbitration."[84] A thirst for power, for revenge, for territorial expansion and for a new hegemonic order was on the verge of reaching critical mass. In hindsight, one sees rather clearly that the opportunities to avoid the coming global war had passed. Tens of millions of innocent people would be killed, massive amounts of wealth and natural resources consumed and the global ecosystem shaken by firestorms and two nuclear explosions before the insanity ended. Einstein, for one, understood the level of transnational commitment and collective action required to have any meaningful impact on the actions of those who govern. There was simply no means in his time of accomplishing what had to be done. The task would fall to the survivors:

Moral disarmament, like the problem of peace as a whole, is made difficult of solution because men in power never want to surrender any part of their country's sovereignty, which is exactly what they must do if war is to be abolished. I am convinced, therefore, that the solution to the peace problem cannot be left in the hands of governments; rather, we must see to it that people who are intellectually and morally independent pool their influence and resources in fighting militarism. That is how we must counteract the doubt and disillusionment which are currently undermining the all-important influence of intellectual leaders.[85]

The isolationist posture taken by the United States government, the only social democracy with sufficient industrial and potential military power to check fascist ambitions, hastened what was probably inevitable in any event. Ironically, after Einstein found refuge in the United States he ended up playing an important role in the eventual decision to develop nuclear weapons.

The last, if remote, opportunity for the social democracies to remove the basis for the fascist ascendancy was the 1933 World Economic Conference in London. If the United States would agree to the cancellation of the debts remaining from the First World War, British and French leaders could do the same with German reparations. These measures would, perhaps, create an atmosphere in which protectionism softened and an expansion of international trade could pull the world out of the Depression. In the months directly preceding the Conference, Roosevelt met in Washington, D.C. with leaders and representatives from virtually every major trading partner of the United States, including the Japanese, Germans and Italians. The U.S. President was convinced that little progress could be made along the economic front without disarmament and a firm nonaggression commitment on the part of all nations. Adolf Hitler immediately responded to Roosevelt by challenging the armed nations to disarm. Germany, after all, was without even a credible defensive force. Hitler let the world know, however, that absent disarmament he would bring German forces up to parity with other nations.

Later in May, the U.S. delegation left to attend the Economic Conference in London. Although Secretary of State Hull was the senior official in the delegation, Roosevelt destroyed whatever potential existed for an international agreement by instructing Treasury's Oliver Sprague to make no concessions on U.S. policy concerning gold and the adoption of fixed exchange rates. Roosevelt also had no intention of canceling the war debts, even though payments from Britain and France had already ceased. In this atmosphere, the prospects for reducing protectionist tariffs and moving the pendulum back in the direction of open markets were dismal. To the traditional conflict between free traders and protectionists was added the appearance of two schools of planners, one decidedly nationalist and the other internationalist. In the end, the conference faltered because Roosevelt refused to commit the United States to a scheme of fixed exchange rates against sterling and the franc. Roosevelt later explained his position:

This country knew, and all other nations knew, that we were engaged at home in a great program of rehabilitation -- a program which called for the raising of values -- and that no human being could, at that moment, determine exactly where even a temporary stabilization point should be fixed for the dollar, franc and pound.[86]

Moley, who had remained in the U.S. to work with Roosevelt on other matters, was directed by Roosevelt to join the others in London and make sure they understood the firmness of his position. Roosevelt was willing to reach an accord -- that is, to stabilize the exchange rates -- but only insofar as doing so did not result in a collapse of the dollar price for goods. Moley writes that Roosevelt directed him to "impress upon the delegation ... that his primary objective was to raise the world price level," and as had occurred in the United States, other countries would reap the benefits of "raising prices, relieving debtors and increasing purchasing power."[87] Reaching London, Moley communicated Roosevelt's instructions to Hull and waited. Faced with Roosevelt's intransigence, the French decided to try to achieve at least some agreement on the principle of stabilization as a long-term objective. At this point, Hull assigned Moley and Oliver Sprague the job of negotiating a compromise. A long explanation of the proposed agreement was cabled by Sprague to Secretary of the Treasury, William H. Woodin, for his evaluation; an earlier version of the agreement itself was sent by William Phillips directly to Roosevelt. Despite the recommendations of Woodin, Hull, Moley, Dean Acheson and Bernard Baruch, Roosevelt refused to budge. Walter Lippmann, who had been in frequent contact with Moley and others in the delegation, provided his assessment of what had happened for public consumption:

Mr. Roosevelt cannot have understood how completely unequipped are his representatives here to deal with the kind of project he has in mind. For one thing, they do not know what is in his mind. For another, there is not among them a single man who understands monetary questions sufficiently to debate them. For another, they have been so frequently repudiated that they are demoralized. For another, they are divided among themselves. How can a delegation, which lacks authority, which lacks technical competence, which lacks unity, which lacks contact with the President, hope to undertake the kind of difficult negotiation for far-reaching reforms which the President desires? It cannot be done. ...[88]

Lippmann had arrived to cover the conference on June 23 and the following day had renewed over lunch his friendship with John Maynard Keynes. Britain's most outspoken economist had already expressed support for U.S. reluctance to commit to fixed exchange rates (i.e., an effective return to the gold exchange standard). He now explained to Lippmann why government spending on public infrastructure and social welfare was essential to a full economic recovery. After the announcement of Roosevelt's position, Moley and Lippmann were each summoned by Britain's Prime Minister, Ramsay MacDonald, and asked to use their influence with Roosevelt to reopen the door to compromise. On the evening of July 4, Moley called a meeting that included both Lippmann and Keynes, the purpose of which was to prepare a public statement that would express Roosevelt's views in a manner that might yet save the conference from dissolving. The President later gave his approval, and the statement was released in London. It came too late. The overwhelming majority of delegates could see no reason to continue, and the conference was adjourned.

A few years later, Michael-A. Heilperin of the Graduate Institute of International Studies in Geneva was one of the first to advance the idea that before a new world order could emerge the old order would have to collapse, and that the unfortunate mechanism would be a destructive nationalistic conflict. "Internationalism," he wrote, "situates a country within the framework of a collectivity of interdependent though politically sovereign States; it looks for the solution of an individual country's problems within the network of international relations."[89] In the context of economic policy, then, internationalism …

consists in the co-ordination of national monetary policies; nothing is said about the nature of these policies. They may be deflationary policies, stabilisation policies, expansionist policies. So long as they are carried out concurrently by different countries the international stability can be preserved.[90]

By Heilperin's definition those who governed the nation-states of the world were still a great distance from adoption of an internationalist approach to cooperative policy making. Force would, inevitably, have to be used.

The weight of the Depression accelerated what had been a process of incremental change; and, as governments sought a new equilibrium between class interests the result was a combination of increased regulation of industry and financial institutions, the introduction of macroeconomic planning and an expansion of public services and public employment -- funded by a combination of taxation (mostly on labor, capital goods and commerce) and an expanded reliance on issuance of government securities. Governments also exercised varying degrees of control over the issuance of currency through the vehicle of their central banks. If unchecked by domestic and international pressures, governments could act unilaterally and expand the quantity of notes in circulation. Keynes proposed that governments use these powers -- and "a somewhat comprehensive socialisation of investment"[91] -- in pursuit of a full employment economy, while preserving the beneficial aspects of "the decentralisation of decisions and of individual responsibility" as "the best safeguard of personal liberty" and "personal choice."[92] By his expression of these values, Keynes revealed himself to be a transitional figure in the drama being played out around the globe. He placed himself squarely at the center of a theoretical debate that promised far-reaching policymaking implications. Almost everywhere, the largely unpropertied majority were more than willing to trade some or nearly all of their personal liberty and personal choice for security, stability and employment. Governments were being pressed by circumstances to become more proactively involved in economic matters; and, in those societies already dangerously close to totalitarian domination the State became a primary player in the markets by virtue of central planning or outright nationalization of assets.

One point understood by economists was that the greater the involvement of government as a catalyst for the production of goods and the utilization of services, the less reliable would be the price mechanism as the agent of equilibrium. Governments, after all, were (in much the same way as private concerns in control of locations and natural resource-laden lands) not subject to the constraint of first having to produce before they could consume. When armed with the additional power to self-create their own credit by means of currency expansion, governments became the agent of wealth redistribution. In a world where the concentration of wealth and income left so many millions in desperate poverty, the use of these powers seemed to a growing number of analysts to be the only solution. Wilhelm Roepke, Heilperin's colleague at the Graduate Institute, described what he saw as the grave dangers one school of economists were helping to unleash on an unsuspecting world:

A liberal -- one [in Europe] who puts his trust in economic laws rather than in the whims of government -- will generally opt for the tied or automatic standard. A collectivist -- one who is willing to trust the caprice of the government over natural economic forces -- will prefer the untied or manipulated standard. Since, however, the linking of money to a precious metal implies a much stricter control over the quantity of money than can be expected from arbitrary government regulation, we find that, paradoxically, it is the [European] liberal who, in money matters at least, demands a discipline far stricter than the collectivist. ...

...While the liberal holds private initiative and free competition to be desirable in the realm of goods production, he knows that judicious regulation of the quantity of money cannot be expected to emanate from those sources. What is needed instead is a carefully thought-out system of monetary control instituted and supervised by government.[93]

The best the private and public sectors had been able to come up with during the long era of fractional reserve banking and government sanctioned currency was to have governments monopolize the market for precious metals. Stability in the purchasing power of currency depended, in large part, on a steady inflow of gold derived from an aggregate trade surplus with other countries. So long as currency was perceived by holders as being as good as gold, things went along smoothly. Roepke went further, vigorously arguing the case for a gold-backed currency system. Countering Roosevelt's worries over deflation, Roepke warned against "risky monetary schemes aimed at banishing ... deflation," arguing that, "it is inflation, and nowadays especially the insidious inflation of credit money, which constitutes the greatest and most imminent danger."[94] Only government could declare a currency to be legal tender, and only government could force producers to accept that same currency in payment for goods and services. Those who could do so would find safest harbors to protect their assets from the actions of government. For the very wealthy, a period of deeply depressed prices for material goods and land was a good time to acquire these assets and hold them in anticipation of eventual recovery. The same strategy of converting currency to material assets might also be called for during a period of rising prices. Holding currency in any quantity made sense only in periods of relative price stability. Lower down the socio-economic ladder, people had few if any options but to endure whatever came. The best they could hope for was a general recovery and renewed demand for labor. Until then, they could rely on government or unite to pressure government to provide for them.

Governments hard-pressed for revenue could have looked to the assets of the wealthy as a primary subject of taxation. A surtax on the assessed value of land would have generated revenue, even if in the short run the higher tax burden to landowners did not stimulate development. That did not happen; it did not even occur to anyone in a position to affect policy. Instead, governments resorted to borrowing from the wealthy, hoping to find some sources of revenue to meet debt service requirements as well as anti-recession programs. The unemployed and working poor could not be taxed, and they had no savings left to draw on. And, the wealthy proved increasingly reluctant to invest in government bonds in those nations suffering from depreciation in the purchasing power of currency. Absent a willingness to tackle the underlying socio-political problems that had created the so-called business cycle in the first place, political leaders in the social democracies were eager to believe that the proper management of fiscal and monetary policies could revive their economies. In the countries run by statist regimes, coercion and outright confiscation would prove to be more effective strategies.

And The Drift To War Production

The general consensus of historians examining the Depression era is that Roosevelt's decision to pursue a unilateral monetary policy turned weak cooperation among the social democracies into outright economic warfare. Economist Broadus Mitchell later wrote that this " was probably the most momentous [decision] that Franklin Roosevelt made."[95] Unanswered to anyone's satisfaction is whether the President fully understood in the early 1930s that the looming struggle for global hegemony was no longer between individual nations but between societies associated by similar socio-political arrangements and institutions -- the social democracies, the fascists and the Bolsheviks. That social democracy was incompatible with imperialism was not yet recognized. Imperialists in Britain and France refused to accept a future in which their power and influence over foreign peoples disappeared. Only the threat of global warfare reopened discussions that acknowledged the need for international cooperation. The dominant attitude remained one of mistrust and the expectation that all negotiations came with hidden agendas. Roosevelt was in certain respects an important exception. James MacGregor Burns states in his biography of Roosevelt that his decisions were part of an unexpressed vision of foreign relations by which "he fashioned measures of international co-operation that enabled him to veer back and forth between isolationism and internationalism as political conditions required."[96] Or, more accurately, as conditions permitted. Policies that on the surface seemed in the national interest often had unforeseen consequences. Producers wanted two things: protection from competition and access to any market where they could expect profits. Thus, while the world's governments embarked on a protectionist trade war, industrialists busied themselves at finding ways to circumvent tariffs, quotas and taxes. For example, companies based in the United States established production facilities in over two hundred fifty other countries between 1930-32 to escape the restrictions imposed by Hawley-Smoot. A third of these investments were made in Canada. Sadly, the last idea that would have occurred to Roosevelt or any of the world's leaders was to move the global economy toward what Henry George described as a fair field with no favors supported by a system of sound money.

Absent necessary structural reforms, each nation attempted to pass on to others (and to those at the bottom of their own society) the cost of subsidizing monopolistic privilege and payment for government programs. Within this context, and the impossibility of real change, Roosevelt's nationalistic posture was understandable. Churchill and many others in Britain thought as much. Keynes convinced Walter Lippmann that Roosevelt had only done what was dictated by circumstances, a message Lippmann later relayed in a speech at Amherst. The economist O.M.W. Sprague, who had served as Chief Economic Adviser to the Bank of England before becoming economic adviser to the U.S. Treasury at Roosevelt's request, was among the delegates to the 1933 international economic conference in London. He resigned from his position as economic advisor to the U.S. Treasury in protest over Roosevelt's monetary policies and from thereon stood with the loyal opposition. He argued for more, not less, domestic competition, for "a reduction in relative prices of those goods and services for which a large increase in demand might reasonably be anticipated"[97] (e.g., the construction of new housing units), and for high wage policies as the best means of stimulating demand and a recovery of profits. Without suggesting a public policy solution, however, Sprague warned that a spurt in housing construction could be accompanied by a rapid deterioration in its affordability because of the operation of land markets:

Then again, there is the matter of land values. An accelerated house-building program, even though costs are held down or reduced, may be checked by an upward movement in the price of land.[98]

Sprague does not comment on what measures might be employed to check the upward movement in the price of land. Despite the dysfunctional nature of land markets there would be a window of opportunity through which many households might achieve home ownership. Eventually, however, recovery of housing demand would attract investment in land not for development but for speculation. If demand increased gradually, the level of nominal wages might increase at a rate sufficient to absorb the higher land cost component and not materially affect the recovery. If rapid, the recovery would certainly be short-circuited by an upward spiral in land prices. Whether or not land prices would fall just as quickly as they had risen would depend, in large part, on whether the nation's financial institutions had extended credit to those who speculated in land. Not only would the speculators begin to default on land loans, another round of bank failures might ensue as well.

Although Sprague offered no means of resolving the dilemma, Harry Gunnison Brown did what he could to bring attention to the proposals articulated by Henry George to collect the annual rental value of locations as a primary source of public revenue and a central means of stimulating investment in productive activity. Neither Sprague, nor Tugwell nor Berle paid any attention. What bothered Sprague most about Roosevelt's attempts to achieve recovery through a general increase in prices was the President's reliance on devaluation of the dollar, "a depreciation which did not rest upon a firm foundation" and where there "was always present an underlying tendency for the dollar to reverse its course and appreciate."[99] In Sprague's view, the dollar was certainly not overvalued in relation to other major currencies. In fact, despite the tariff war the U.S. still experienced a trade surplus, and the vaults of the Federal Reserve Banks contained some $3.5 billion worth of gold reserves. Sprague wondered how Roosevelt could possibly think the governments of other countries would accept an increase in imports from the U.S. at the expense of domestic producers. They would certainly raise tariffs or depreciate their own currencies as a countermeasure. In fact, nearly all countries except France had already abandoned the gold exchange standard. Roosevelt was nonetheless determined to drive up the price of gold by instituting a program of government purchases. Dean Acheson, who had been charged with selling U.S. government securities to the public, resigned in protest; investors, he argued, were being deliberately cheated out of purchasing power.

In the minds of many observers, economic policy under Roosevelt seemed to have no cohesive rationale. There was no way to accurately forecast what was going to happen next or agreement on whether the government should be proactive or wait to see if things improved or worsened on their own. Walter Lippmann assessed the situation as follows:

… There are four philosophies at work in Washington. First we had the internationalists versus the nationalist view, then the nationalists split up into the planners and the monetary people. Personally, being by temperament a skeptic and having very little faith in the power of any formula to encompass the enormous variety of real things I am an incurable eclectic. That is to say, I believe in all four philosophies at the same time and think the contradictions between them are much less important than the positive contributions which each can make. …[100]

As 1933 came to an end, Roosevelt was heartened by signs that his efforts to orchestrate currency depreciation seemed to be working. Prices for certain commodities had, indeed, increased considerably. Debtors were able to repay creditors with more easily obtained dollars. On the social welfare side of public policy, important strides had been taken to prevent the use of child labor (and thereby increase the employment opportunities for unskilled adults) and to establish a minimum wage in many industries. A significant victory for workers occurred when the nation's coal mine owners agreed to adopt minimum standards and not to interfere with union recruiting. In January of 1934 the U.S. Congress passed the Gold Reserve Act, setting the official price of gold at $35 an ounce and ending the government's manipulation of the gold market. Nevertheless, although the depths of the economic and social crises were far from over, Roosevelt's mandate for change was already under attack. In the minds of a growing minority, Roosevelt's programs represented not temporary relief measures but a dramatic extension of Federal power executed by bureaucrats not required to answer to the electorate. As restlessness was forged into organized opposition, the Republicans established a Bureau of Economic Research to counter Roosevelt's brain trust. Herbert Hoover, far from being defeated in spirit, responded to the New Deal with a serious book, The Challenge To Liberty. The choices, and the consequences of taking Roosevelt's new interventionist path, were plain to Hoover. "Our system has at all times had to contend with internal encroachments upon Liberty," he acknowledged. "Greed in economic agencies invades it from the Right, and greed for power in bureaucracy and government infringes it from the Left."[101] Those who cherished liberty understood what Hoover meant when he said that "all forms of economic tyranny have long demonstrated that it was no system of laissez faire."[102] Outside of the Georgist remnant, few on either side of the political debate saw little or no relation between the protection of liberty and the just constraint of freedom. Hoover's great fear was that citizens would accept the erosion of democratic processes and open criticism of government in exchange for a false sense of security. The German, Italian and Russian peoples had, after all, lost any opportunity to express opposition to the actions of those who held power. In response, Hoover sent out a call to arms -- not for a return to the status quo of unbridled individualism and privilege, but for change that treated with care the socio-political arrangements and institutions established by the framers:

...[U]ntil recently, in all of our continuous adjustments we have preserved the great individual rights with which men were endowed by the Creator. Nor have we receded from the Constitutional principle that not even government shall trespass upon them.

Our American System has ever recognized that the borders between liberty and license, between free speech and slander, order and disorder, enterprise and exploitation, private interest and public interest are difficult to define. But the domain of liberty can be defined by virtue, reason, by the common will, and by law. It cannot be defined by arbitrary power.[103]

One is moved to ask whether Hoover in his defense of individualism demonstrated a clear appreciation for the distinctions between liberty and license. The framers dislodged from the American System the Old World's formal preservation of hereditary privilege, but a good deal of privilege remained entrenched and carried forward from one generation to the next. Hoover could not dispute Roosevelt's observation that much of the wealth of Americans was inherited. All he could do was call for a renewed commitment to equality of opportunity and "a just diffusion of national income which will give protection and security to those who have the will to work."[104] He now realized that the American System had become corrupted but he did not have a clear idea of how to resurrect the idealism and clarity of purpose exhibited in the writings of men such as Paine, Franklin, Adams or Jefferson:

...[Liberty] does not hold that there is a license of business to exploit; on the contrary, it holds that economic oppression is servitude. The American System holds equally that monopoly, group or class advantage, economic domination, Regimentation, Fascism, Socialism, Communism, or any other form of tyranny, small or great, are violations of the basis of Liberty.[105]

Hoover reminded his fellow citizens of the remarkable accomplishments of their society, under conditions where government's most important contribution had been to allow individuals to come together in cooperative enterprise. Civic and community leaders were joined by university-educated professionals in campaigns to clean and rebuild cities, provide more broad-based and efficient public services and bring the blessings of republican democracy to the millions of immigrants who poured into the country. The pattern of incremental reform had been interrupted by a global disaster; even these terrible circumstances did not point to a bankruptcy of the American System. What the Depression accomplished was to bring to light the abuses liberty had been subjected to. Roosevelt's response - the strategy of "economic Regimentation" characterized by "a vast centralization of power in the Executive"[106] - was the wrong corrective course. He pointed to the adoption of production and pricing guidelines under the National Industrial Recovery Act as the reason so many smaller, independent producers had gone out of business. Not unexpectedly, Hoover's analysis failed to identify the system of land tenure and taxation as a problem to be addressed in order to cleanse the American System of monopolistic privilege and the profits of rent-seeking.

Hoover notwithstanding, Roosevelt's response to his critics seemed sincere enough. In the interest of full public disclosure and objectivity, Clarence Darrow was asked to chair a committee investigating the actions and achievements of the NIRA. Around the nation, the great industrial landlords continued to resist worker attempts at collective bargaining. Violent strikes erupted by longshoremen and truckers, as well as aluminum, steel and railway workers. When the votes were counted after the 1934 elections, the Democrats emerged even more solidly in control of the U.S. Congress than previously. Roosevelt gave people reason to believe he would take action; now, with an overwhelming majority in the U.S. Congress, an accelerated pace of recovery and amelioration of suffering was bound to be expected. Standing in the way, however, was a well-organized conservative challenge that included leading old-line Democrats, as well as a wide range of extremist groups of various stripes. Al Smith and John W. Davis (who had run for President in 1924 against Harding) left the Democratic Party to join the American Liberty League, founded in 1934 by a group of wealthy industrialists to defeat the New Deal. The actions taken by Roosevelt to meet these challenges have been interpreted differently by historians and others based to a significant degree on their ideological bias. He either saved the republic from violent societal upheaval, or facilitated the introduction of Federal and Executive power that has effectively stifled efforts to achieve real structural reform. Whichever is the case, he was motivated by a respect for the seriousness of the circumstances. One historian, George Wolfskill, put it this way:

With the mounting pressure of conservative and radical factions forcing the issue, Roosevelt made his choice. It was to try to alleviate the miseries of the masses through the most far-reaching program of economic and social legislation ever undertaken in the history of the Republic.[107]

Walter Lippmann, surveying the landscape of the New Deal, thought he sensed the emergence of a new socio-political philosophy, what he called "free collectivism," which (in spirit) touches on one of the important components of cooperative individualism - the adoption of socio-political arrangements and institutions that promote cooperative behavior by ensuring equality of opportunity. This "method of social control," wrote Lippmann, "is collectivist because it acknowledges the obligation of the state for the standard of life and the operation of the economic order as a whole." Equally important, "[i]t is free because it preserves within very wide limits the liberty of private transactions."[108] Roosevelt was not, of course, a political philosopher armed with a grand scheme. He was a pragmatic political leader who recognized the need for frequent compromise. Whether he compromised his own principles is a conclusion I leave to Roosevelt scholars. A more important question is whether the Roosevelt influence was to be permanent and deeply-penetrating or largely overturned as conditions improved and power returned to those who benefited by laissez-faire protectionism and entrenched privilege.

One of Roosevelt's next steps was to obtain passage of an Emergency Relief Appropriations Act, supported by an allocation of nearly $5 billion in Federal funds. The Public Works Administration used part of the appropriated funds to modernize the nation's infrastructure, while the Works Progress Administration put millions of people to work. What soon became evident was that Roosevelt had far less to fear from Liberty League members than from the Supreme Court of the United States and questions of constitutionality raised by New Deal legislation. In January of 1935 the court ruled that NIRA could not be applied to the interstate transport of oil and in May declared the detailed and frequently arbitrary regulations adopted by the National Recovery Administration unconstitutional. Almost at the same time, the Congress passed the National Labor Relations Act, which Roosevelt signed, strengthening the position of organized labor. Legislation followed establishing a graduated corporate income tax, increasing the maximum tax rate on marginal personal incomes, providing unemployment and old age benefits and attacking the privileges of holding companies.

Practitioners of orthodox economics worried over Roosevelt's astonishing inroads into the traditional structure of markets. Princeton University's Edwin W. Kemmerer, for example, offered his services as a speaker to the Liberty League and was joined by more than a few of his professional colleagues. An English translation of Joseph M. Schumpeter's analysis of business cycles had just been published by Harvard University, and with this theoretical work was the door was opened wider for the future use by government of monetary and fiscal tools with the object of managing economic growth. Acknowledging "that the economic system does not move along continually and smoothly,"[109] Schumpeter went on to offer his insights into the reasons why this was so. There were, of course, numerous forms of external shocks (e.g., wars and natural disasters). Even without these influences, however, the behavior of individuals and groups produced the cyclical movements from expansion to contraction and back. Periods characterized by rapid innovations bring on what Schumpeter described as "the swarm-like appearance of new combinations" and "supernormal stimulation" of capital investment and "the characteristic rise in prices during booms ... increased need or increased costs alone can[not] explain."[110] In a footnote, he adds:

In principle rents must also rise. But where land is let on a long lease they cannot do so, and in addition many circumstances prevent the prompt rise of this branch of income.[111]

What this particular observation ignores is that many who hold land are recipients of imputed rental income because they make no or very low payment to anyone for the privilege. Historically, landowners are under little financial pressure to bring land into production or to the market. They might obligate themselves to a long-term relationship with a particular tenant; however, very few such leases are made at a static annual ground rent. Increases in the rental value of locations are generally captured by landowners through terms that permit periodic escalation. During periods of downturn, on the other hand, rents charged tend to remain above the true market rental value (at least for a period of time), causing the net wages and interest returned to the user (which are falling rapidly in response to the market downturn) to fall even more deeply. The result is a chain reaction of business failures and bankruptcies. One need only look closely at what happens to the cash flow received by owners of commercial, office and retail space during periods of downturn. Business failures turn the market for improved locations into a buyers' market. For those who hold title to the location as well as the improvements, the absence of a ground rent payment to a third party allows them to absorb a reduction in imputed rent without the same degree of impact on net cash flow as someone faced with a ground rent payment that is sticky downward.

What Henry George's analysis of the business cycle tells us, and experience confirms, is that the natural system of production and distribution does in fact generate a boom-to-bust cycle, but a cycle consistently and predictably responsive to the application of appropriate tax policy. On this particular subject, Schumpeter at this point in his career had nothing to say.[112] Only Harry Gunnison Brown and a small number of other economics professors around the globe remained vocal in their belief that economic rent should be taxed at a very high rate. And, as Christopher Ryan concludes, "the reputation of Harry Gunnison Brown appears to have suffered as a result of his persistent espousal of George's cause."[113] At the same time, few economists were lining up to join with Rexford Tugwell in his quest for direct government management of the economy. Although Tugwell later accepted criticism for failing to recognize the importance of achieving consensus and moving incrementally, he thought Roosevelt rather timid responding to the Depression:

He seems heroic to those who measure his amazing resemblance to Hoover -- under a contrasting mask. They do not realize that both saw the same light and both followed it. Hoover had wanted -- and had said clearly enough that he wanted -- nearly all the changes now brought under the New Deal label. ...

...[T]he Roosevelt measures were really pitiful patches on agencies he ought to have abandoned forthwith when leadership was conferred on him in such unstinted measure. I thought then he could have, and I now think he could have. The full tragedy of his turning away was measured in later troubles. Unless I am mistaken, painful reorganizations are still to be gone through.[114]

Tugwell's inclinations were toward a far more collectivist, centrally-directed society than Roosevelt ever contemplated. Tugwell was joined by Keynes in a recognition that in a world already operating under the weight of protectionism, the responsibility of government was to broaden and raise the level of individual purchasing power at home. This required, argued Tugwell, central planning and programs to redistribute income from the haves to the have nots, either directly or indirectly through the development of the welfare state.

Within the Roosevelt cabinet, Cordell Hull and Henry Wallace were the strongest voices against the arguments for economic nationalism and isolationism gaining ground as the basis for policy. As Secretary of State, Hull's reaction was based on the dangers of using trade restrictions as a political weapon. Wallace, on the other hand, foresaw only great troubles for U.S. farmers if they were cut off from lucrative export markets. Both Hull and Wallace were, however, instrumental in getting the Congress to pass the Reciprocal Trade Agreements Act in June of 1934. Out of this came a new approach to trade negotiations that made tariffs and quotas bilateral in nature. Hull had hoped for a return to free and unrestricted trade but was willing to settle for an increase in imports that would reduce the amount of debt owed by Old World governments to the U.S. This, in his view, was essential for global stability and a reduction in the tensions building across the Atlantic. Once again, however, such measures were simply too little, too late. The great cleansing was on the horizon, and millions of innocent people would pay the ultimate price for the foolishness practiced by those in possession of power.

Despite the determined opposition of the privileged -- or, perhaps, because of it -- Franklin Roosevelt was returned to the Presidency in 1936. Roosevelt was now more convinced than ever that the concentration of industrial production and of wealth were primary causes of the nation's lingering ills; more importantly, he was ready to use the powers of government in order to secure a more level playing field. The result was an Executive branch committed more deeply to legislative reform and regulation than to the type of industrial planning desired by Tugwell. Raymond Moley quickly became disaffected by the intensification of Roosevelt's verbal and policy attacks against the institutions of the wealthy. He now reached the point where he could no longer remain in government service and decided to accept an offer by Vincent Astor, Averell Harriman and Mary Harriman Rumsey to establish and edit a new weekly news journal. He remained a confidant and frequent adviser to Roosevelt until mid-1936, using his editorial position to support New Deal legislation until his final break with Roosevelt. Ted Morgan surmises as well that Moley was largely responsible for Roosevelt's decision to formally recognize the Bolshevik government in Russia. What finally pushed Moley into the anti-Roosevelt camp was the President's acceptance of a permanent responsibility by the Federal government for many functions Moley considered the legitimate -- and constitutional -- province of the states. Thus, with Moley's departure the original Brains Trust was dislodged in favor of individuals who thought the nation needed an overhaul of long-standing socio-political arrangements and institutions. Of Roosevelt's first three years in office, New Dealer Gardiner C. Means told Studs Terkel, "There was no question in our minds we were saving the country. ...People who were personally concerned about a better world, came to Washington, were drawn to it. Even though where we were going was still to be worked out. There was an elan, an optimism ... an evangelism ... it was an adventure."[115] According to Moley, much of that enthusiasm disappeared after Roosevelt's reelection:

The second New Deal was an entirely different thing. My disenchantment began then. Roosevelt didn't follow any particular policy after 1936. Our economy began to slide downhill -- our unemployment increased -- after that, until 1940. This is something liberals are not willing to recognize. It was the war that saved the economy and saved Roosevelt.

We had a slight recession in 1937, which was occasioned by his attack on copper prices, specifically, and on business, generally. Of course, his Supreme Court packing plan shocked the people. They resented it. It was his first great defeat. Then he tried to purge Congress in '38. Everyone he tried to purge was re-elected, except one Congressman in New York.

I think if it weren't for the war, Roosevelt probably would have been defeated in 1940. You would probably have had a more business-minded Administration: less centralizing on the part of Washington. More normal conditions would have prevailed.[116]

Roosevelt's attack on the Court was a political fiasco. The President felt he needed an accommodating body of jurists on the Supreme Court and attempted to orchestrate a legislative coup to, as Moley writes, pack the court with his own appointees. Although this failed, seven of the nine justices departed on their own between 1936 and 1942. In the absence of any effort to capture economic rent for public use, Roosevelt committed the government to entitlements and redistributive measures -- the foundation for a welfare state. The four years of Roosevelt's second term were characterized by a real loss of national unity. In the process, Republican and Democratic party leaders had legitimate reasons to fear the ascendancy of a militant third party movement. That socialists largely adopted incrementalist strategies in support of the New Deal and radicals failed to attract large followings must be credited to Roosevelt's calming style of leadership. Within the government and even his own administration, he played the moderating role between those who sought more extreme -- and sometimes opposing - approaches to policy. This was certainly true where his economic advisers were concerned.

Although Tugwell had been the economist closest to Roosevelt during the formative years of the New Deal, numerous other economists found opportunities to influence public policy by joining the agencies created by the Administration. Schlesinger identifies one economist in particular, Mordecai Ezekiel, as playing a key role in the development of the Federal government's program to stimulate agricultural and industrial production by making forward commitments to purchase unsold surpluses. Producers agreed to achieve specific levels of output, creating markets for one another in the process, with the Federal government as the purchaser of last resort. Success under such a plan required, argued economist Gardiner Means, a level of understanding of the national economy that economists did not yet have. The process of data collection and analysis was labor intensive and an undertaking few thought possible. Means nonetheless took on the challenge and began his research in late 1935. Those on the inside were in a sense committed to the use of government power in ways not previously contemplated. The objectives were two-fold -- to tame the business cycle and to solve (or at least significantly mitigate) the problem of widespread poverty. In 1936, two books appeared that offered very different interpretations of the problems and solutions. The first cemented for all time to come the influence of John Maynard Keynes. The second, by the philosopher George Raymond Geiger, dealt once again with land and markets and failed to attract a broad audience.
CH 1 CH 2 CH 3 CH 4 CH 5 CH 6
1.1 2.1 3.1 4.1 5.1 6.1
1.2 2.2 3.2 4.2 5.2 6.2
1.3 2.3 3.3 4.3 5.3 6.3
1.4 2.4 3.4 4.4 5.4 6.4