Saturday, September 16, 2017

No one is talking about leaving the gold standard

Daniel Hannan in the Telegraph (and yes, it's a really bonkers Sunday Telegraph edition) --

How many times, for example, have you heard it claimed that the Great Depression came to an end because of rearmament and war? It’s simply not true: Snowden and Chamberlain responded to the crash with sharp spending cuts and, in consequence, the 1930s saw some of the strongest growth in British history.

That's a laughable misreading of the UK's experience during the Great Depression, in which 1931 spending cuts made it worse, but the heterodox policies of devaluing the pound and imposing imperial preference tariffs helped. An additional irony is that Hannan presents his interpretation of the Great Depression within a context of claiming that Bastiat's broken-windows fallacy disproves any argument for the stimulus effect of government spending. 

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