Herbert Hoover And The Great Depression In Thesis

Length: 5 pages Sources: 5 Subject: Economics Type: Thesis Paper: #60594203 Related Topics: Joseph Stalin, Depression, Humanitarian Intervention, Keynesian Economics
Excerpt from Thesis :

Herbert Hoover and the Great Depression

In recent years, a debate has arisen regarding the extent of Herbert Hoover's progressive and Keynesian leanings, with conservative historians suggesting that Hoover may have been less of an advocate for laissez -faire capitalism than was commonly believed during his lifetime. Ideologues such as Amity Shlaes and Murray Rothbard have suggested that Hoover was a closet statist and New Dealer, and that Franklin Roosevelt simply continued many of these policies in a natural progression. On the other hand, liberal and mainstream historians have generally accepted the idea that Hoover was perhaps a more activist president than his earlier reputation may have indicated, but disagree with conservative historians as to the extent of Hoover's progressive inclinations. They argue that Hoover's retreat from laissez-faire policies was too little, too late, and ultimately inadequate to deal with the severity of the economic crisis, a position in direct opposition to the claims of historians such as Shlaes and Rothbard.

For conservative supporters of unregulated market capitalism, Hoover's "progressive" policies were the actual cause of the Great Depression, and rather than alleviating the economic turmoil, actually made it worse. They use Hoover and FDR as object lessons in how not to deal with the periodic downturns within capitalism, arguing like their 19th Century predecessors that the system is self-correcting. The truth about Hoover's economic politics lies somewhere in-between, and in fact, the subtlety of his shifting opinions regarding government intervention and the gap between his rhetoric and his actions are what has allowed biased historians to find ample evidence for whichever characterization of Hoover they support while conveniently ignoring the details which might otherwise complicate that characterization.

In particular, the recent work of conservative historians Murray Rothbard, Robert Murphy, and Amity Shlaes fabricates an argument suggesting that not only was Hoover a secret progressive, but that this hidden agenda was ultimately responsible for the devastation of the Great Depression. Furthermore, these conservative historians are shameless in their revision, as this altered history of the Great Depression is almost certainly a roundabout way of influencing the current debate regarding the latest economic catastrophe caused by deregulation.


Thus, their work is two-fold; it serves to exonerate their own political ideology for the damage it caused during Great Depression (and arguably, for the damage currently being done by the Great Recession), and to disparage any opposing or differing opinions regarding the management of the American economy.

In order to better understand Hoover's complex position regarding government intervention during the Great Depression, and how this position is twisted and redacted into the fictional character that is "the progressive Herbert Hoover," it will be useful to briefly examine Hoover's early history and career in public service. Though seemingly ancillary information such as his religious upbringing and childhood poverty may seem to have little relevance when discussing the substance of his economic policies, it is important to examine these details because even something like his Quaker background will ultimately be used by conservative historians as a means to argue for Hoover's condemnation (to the point that one historian even manages to make a connection between his Quaker upbringing and Joseph Stalin's Soviet Russia.)

Hoover was born into poverty and worked his way up the socioeconomic ladder, becoming a millionaire businessman and mining engineer in the model of the 19th Century American success story. To some extent he was already considered a progressive reformer rather than a conservative, described as "a visionary, a man ahead of his times" and in the 1920s, there was even some doubt about whether he was a Republican at all, considering his first government position had been with the Democratic administration of Woodrow Wilson, and his frequent alliance with the progressive-reform factions of both major parties.

Hoover was happiest as a bureaucrat and administrator rather than as a political leader, especially in his jobs as relief commissioner in Europe and as Food Administrator during World War I. John Maynard Keynes met him at the Versailles Conference in 1919 and was very favorably impressed at his fear that social, political…

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From the start, Hoover urged industry not to lay off workers and maintain their 1929 levels of employment, although this eventually proved impossible as the economy continued its downward spiral. At first, Hoover remained an orthodox proponent of balanced budgets and the gold standards, unlike FDR, who abandoned gold in 1934. His Federal Reserve was also slow to respond to the crash and actually seemed to be determined to control inflation by raising interest rates, although this led to a severe contraction of the money supply, which fell by one-third in 1931 alone. As prices and credit continued to collapse, wages fell over 50% in 1928-32, while agricultural prices sunk below the cost of production by 1933.

(This last detail must have been especially galling to Hoover, considering his time spent as Commerce Secretary and his previous belief that government intervention in the agricultural industry was beyond the pale.)

Hoover was known as a humanitarian and compassionate man, and both traits were attributed to his Quaker background. In private he would literally end up crying at his desk in the White House after reading desperate letters from hungry and unemployed citizens. Furthermore, he lamented the fact that the shantytowns that grew up around all major cities during the Depression were called 'Hoovervilles' and his inability to end the economic crisis, but he was unable to translate this

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