Analytical examination of disagreements among sources in scholarly literature

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.

By portraying Hoover as far more progressive than he actually was, and by entwining his policies with those of FDR, Shlaes, Rothbard, and others actively seek to shift the blame for the Great Depression from the undeniable failure of laissez-faire economics to those policies which actually succeeded. 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 and economic conditions in Europe were laying the groundwork for another world war. Hoover was also very successful as Secretary of Commerce in 1921-28, organizing voluntary trade associations as well as standardization of federal flood and drought relief programs.

Although he was well-aware that there were structural problems in the U.S. economy, such as an unregulated stock market engaged in uncontrolled speculation as well as a depressed agricultural sector, he opposed direct federal involvement in these areas as "socialistic."

Thus, even before his ascendance to the presidency, Hoover offered a conflicting picture of his opinion regarding government intervention. On the one hand, much of his success career-wise can be credited to his implementation of relatively progressive policies regarding food and catastrophe relief, but on the other, he was able to dramatically discourage analogous policies regarding the stock market. That he was able to make a mental distinction between flood relief and economic relief such as unemployment benefits is one cause for so much disagreement regarding the "true" extent of his progressivism, although these nuances are rarely considered by the conservative historians arguing for Hoover's inclusion in the collection of American progressives.

When the Depression hit in 1929, it was fast and unexpected, so much so that only a few months before the Wall Street crash Hoover had predicted that poverty was about to be eliminated in the United States (eerily foreshadowing John McCain's claim that "the fundamentals of the economy" were strong almost immediately prior to the current economic downturn). This was a statement that would come back to haunt him as the economy slowed, and eventually ground to a halt.

Banks called in loans and refused to extend new ones in the atmosphere of uncertainty, while agricultural prices collapsed and banks, stores, and swaths of entire industries went bankrupt in record numbers. International trade declined, unemployment increased to levels never seen before and wages of those who were still working fell by 30% in the last six months of 1931 alone.

By 1933, the U.S. banking industry had collapsed and money stopped circulating, to be replaced by a barter system in many parts of the country. Cities and states were overwhelmed and on the verge of bankruptcy, with unemployment rates of 30-50% or more, and "the only things that seemed to be growing were murders, suicides, and the prison population."

At first, Hoover thought that the depression would be temporary and self-correcting, a belief common to conservative economists (even now, after countless examples to the contrary). In fact, Hoover preferred to use the term "depression" rather than "panic," as these economic crashes had been called in the 19th Century, because he thought it would be less upsetting to the public. This same trick was attempted after the double-dip crash of 1937-38, when FDR tried to change perceptions by changing language, using the term "recession" instead of "depression."