Crises and Power
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U.S. Foreign Policy

Quotes on Power

About the book Crisis and Leviathan

Center on Peace & Liberty Great



The economic crisis that began with the stock market crash in October 1929 paved the way for the most substantial permanent institutional change in the history of the United States. The expansion of government power over the individual and social life would make the responses to previous crises pale in comparison. It all began with a plummeting of stock-market values, a predictable (and predicted) consequence of the manipulation of money and credit by the Federal Reserve System, which was established less than 20 years earlier precisely to prevent money and banking crises.

Earlier crises and depressions were short-lived because government leaders, such as President Grover Cleveland, restrained themselves and let markets adjust to new conditions and reestablish their own relative stability. But the response in 1929 was different. While popular accounts hold that government corrective action did not begin until 1933, after the defeat of President Herbert Hoover by Franklin Delano Roosevelt, that is not the case. After the stock-market crash, Hoover signed the historic Smoot-Hawley tariff increase, crippling U.S. exports and world trade generally; pressured businessmen to maintain high real wages despite falling prices and a declining demand for labor; supported increased government spending; raised taxes; engaged in deficit spending; and backed the creation of new interventionist programs and agencies, such as the Reconstruction Finance Corporation to funnel capital to favored failing banks, railroads, and state governments. This was hardly laissez faire. As historian William Appleman Williams wrote, Hoover was not the last of the old presidents but the first of the new.

Nevertheless, when Roosevelt took office, the level of intervention went up several notches. While Hoover had laid the groundwork for debilitating economic intervention that prolonged the crisis, Roosevelt greatly expanded government power using the rhetoric of class warfare and then created the massive federal dole in response to the predictable failure of such approaches. The result was the New Deal, built on World War I precedents, complete with emergency executive decrees, such as the order for citizens to surrender their gold, and the establishment of permanent agencies designed to guide the economic activities of the entire society, such as the Securities and Exchange Commission, National Labor Relations Board, and Social Security Administration. The pragmatic Roosevelt and his collectivist Brain Trust took full advantage of crisis and despair to radically disfigure the American political-economic landscape. But for all his effort, America did not rise out of the Depression, in fact it worsened and unemployment remained high throughout the 1930s. And today, the U.S. system largely reflects this statist vision, with both “liberal” and “conservative” presidents expressing allegiance to the New Deal as having saved “free enterprise.” Roosevelt’s ultimate legacy was the firm planting of the principle, even among the general population, that without the President and the federal government’s oversight and direction of the economy, massive unemployment and economic hardship would result.

Also, click here for Bibliography for Crisis and Leviathan.

Causes of the Great Depression:

Best, Gary Dean. Pride, Prejudice and Politics: Roosevelt versus Recovery, 1933-1938. New York: Praeger, 1991.

Brandes, Joseph. Herbert Hoover and Economic Diplomacy: Department of Commerce Policy, 1921-1928. Westport, Conn.: Greenwood Press, 1975.

Couch, Jim F. and William F. Shughart II. The Political Economy of the New Deal. Northampton, Mass.: Edward Elgar Publishers, 1998.

Dickman, Howard. Industrial Democracy in America: Ideological Origins of National Labor Relations Policy. LaSalle, Ill.: Open Court, 1987.

Friedman, Milton and Anna J. Schwartz. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press, 1971.

Garrison, Roger W. “The Great Depression Revisited,” The Independent Review, Vol. III, No. 4 (Spring 1999), pp. 595-603.

Garvy, George. “Keynes and the Economic Activists of Pre-Hitler Germany,” Journal of Political Economy, Vol. 83, No. 2 (April 1975), pp. 391-405.

Higgs, Robert. “How FDR Made the Depression Worse,” The Free Market, March 1995.

—. “The Mythology of Roosevelt and the New Deal,” The Freeman, September 1998.

—. “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War,” The Independent Review, Vol. I, No. 4 (Spring 1997), pp. 561-590.

Higgs, Robert and Charlotte Twight. “National Emergency and the Erosion of Private Property Rights,” Cato Journal, Winter 1987.

. “National Emergency and Private Property Rights: Historical Relations and Present Conditions,” Journal of Private Enterprise, Fall 1996.

Palyi, Melchior. The Twilight of Gold, 1914-1936: Myths and Realities. Chicago: Henry Regnery Company, 1972.

Phillips, C. A., T. F. McManus, and R. W. Nelson. Banking and the Business Cycle: A Study of the Great Depression in the United States. New York: Arno Press, 1972.

Rothbard, Murray N. America’s Great Depression. Auburn, AL: Ludwig von Mises Institute, 2000.

Shaffer, Butler D. In Restraint of Trade: The Business Campaign Against Competition, 1918-1938. Lewisburg: Bucknell University Press, 1997.

Skousen, Mark. The Making of Modern Economics: The Lives and Ideas of the Great Economic Thinkers. Armonk, N.Y.: M.E.Sharpe, 2001.

Smiley, Gene. Rethinking the Great Depression. Chicago: Ivan R. Dee, 2002.

—. “Review of the book The Political Economy of the New Deal by Jim F. Couch and William F. Shughart II,” The Independent Review, Vol. IV, No. 3 (Winter 2000), pp. 449-452.

Timberlake, Richard H. “Gold Policy in the 1930s,” The Freeman, May 1999.

—, ed. Money and the Nation State: The Financial Revolution, Government and the World Monetary System. New Brunswick, NJ: Transaction Publishers for The Independent Institute, 1998.

—. Monetary Policy of the United States: An Intellectual and Institutional History. Chicago: University of Chicago Press, 1993.

—. “The Reserve Requirement Debacle of 1935-1938,” The Freeman, May 1999.

von Mises, Ludwig. Between the Two World Wars: Monetary Disorder, Interventionism, Socialism, and the Great Depression, edited by Richard Ebeling. Indianapolis, IN: Liberty Fund, 2002.

White, Lawrence H. “Review of the book The Defining Moment: The Great Depression and the American Economy in the Twentieth Century edited by Michael D. Bordo, Claudia Goldin, and Eugene N. White,” The Independent Review, Vol. IV, No. 3 (Winter 2000), pp. 456-461.

Wilcke, Richard W. “Review of the book In Restraint of Trade: The Business Campaign Against Competition, 1918-1938 by Butler D. Shaffer,” The Independent Review, Winter 2000, Vol. IV, No. 3, pp. 446-448.

Yeager, Leland B. “From Gold to the Ecu: The International Monetary System in Retrospect,” The Independent Review, Vol. I, No. 1 (Spring 1996), pp. 75-99.

Economics of World War II:

Darby, Michael R. “Three-and-a-Half Million U.S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934-1941.” Journal of Political Economy 84 (Feb. 1976).

Gardner, Lloyd C. Economic Effects of New Deal Diplomacy. Madison, Wisc.: University of Wisconsin Press, 1964.

Higgs, Robert, ed. Arms, Politics, and the Economy: Historical and Contemporary Perspectives. New York: Holmes & Meier for The Independent Institute, 1990.

—. “From Central Planning to the Market: The American Transition, 1945-1947,” The Journal of Economic History, Vol. 59, No. 3 (September 1999).

—. “The Myth of U.S. Prosperity during World War II,” The Freeman, January 2003.

—. “Regime Uncertainty: Why the Great Depression Lasted So Long and Prosperity Resumed after the War,” he Independent Review, Vol. I, No. 4 (Spring 1997), pp. 561-590.

—. “Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s,” The Journal of Economic History, Vol. 52, No. 1 (March 1992).

—. “Wartime Socialization of Investment: A Reassessment of U.S. Capital Formation in the 1940s,” Working Paper No. 45. Oakland, Calif.: The Independent Institute, February 2003.

—. “World War II and the Military-Industrial-Congressional Complex,” Freedom Daily, May 1995.


Baker, Paula. “Review of the book American Women and the Repeal of Prohibition by Kenneth D. Rose,” The Independent Review, Vol. III, No. 2 (Fall 1998), pp. 286-289.

Conkin, Paul. The New Deal. New York: Thomas Y. Crowell, 1967.

Ekirch, Arthur A., Jr. Ideologies and Utopias: The Impact of the New Deal on American Thought. Chicago: Quadrangle Books, 1969.

Flynn, John T. Country Squire in the White House. New York: Doubleday, Doran & Co., 1940.

—. The Roosevelt Myth: A Critical Account of the New Deal and Its Creator. San Francisco: Fox & Wilkes, 1998.

Garrity, John A. “The New Deal, National Socialism, and the Great Depression,” American Historical Review, Vol. 78 (October 1973). The New Deal in the U.S. was very similar to European fascist economic policies.

Keynes, John M. “Foreword” to the 1936 German edition of his book, The General Theory of Employment, Interest, and Money. Keynes notes that “the theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire.” “Comment” by James J. Martin, from the book, Revisionist Viewpoints: Essays in a Dissident Historical Tradition. Colorado Springs: Ralph Myles, 1971.

Martin, James J. American Liberalism and World Politics, 1931-1941, 2 Vol. New York, Devin and Adair Company, 1964.

Thornton, Mark and Chetley Weise. “The Great Depression Tax Revolts Revisited,” Journal of Libertarian Studies, Vol. 15 No. 3.

Growth of Government:

Armentano, D.T. Antitrust and Monopoly: Anatomy of a Government Failure. Oakland, Calif.: The Independent Institute, 1990.

Bean, Jonathan. “Review of the book From the Outside In: World War II and the American State by Bartholomew H. Sparrow,” The Independent Review, Vol. II, No. 1 (Summer 1997), pp. 132-135.

Beito, David. Taxpayers in Revolt: Tax Resistance During the Great Depression. Chapel Hill, N.C. University of North Carolina Press, 1989.

Collins, Robert. The Business Response to Keynes, 1929-1964. New York: Columbia University Press, 1981.

Flynn, John T. As We Go Marching. New York: Free Life Editions.

Garrity, John A. “The New Deal, National Socialism, and the Great Depression,” American Historical Review, Vol. 78 (October 1973). The New Deal in the U.S. was very similar to European fascist economic policies.

Hawley, Ellis W. The New Deal and the Problem of Monopoly. Princeton: Princeton University Press, 1966.

Higgs, Robert. Crisis and Leviathan: Critical Episodes in the Growth of American Government. New York: Oxford University Press, 1987).

—. “Crisis and Quasi-Corporatist Policy-Making: The U.S. Case in Historical Perspective,” The World & I, November 1988.

—. “Crisis, Bigger Government, and Ideological Change: Two Hypotheses on the Ratchet Phenomenon,” Explorations in Economic History, Vol. 22 (1985).

—. “How War Amplified Federal Power in the Twentieth Century,” The Freeman, July 1999.

—. “In the Name of Emergency,” Reason, July 1987.

—. “War and Leviathan in Twentieth-Century America: Conscription as the Keystone,” from The Costs of War: America’s Pyrrhic Victories, edited by John V. Denson. Auburn, AL: Ludwig von Mises Institute, 1999.

Hunt, E. K. “A Neglected Aspect of the Economic Ideology of the Early New Deal,” Review of Social Economy, Vol. XXIX, No. 2 (September 1971).

Kousser, J. Morgan. “Review of the book Southern Paternalism and the American Welfare State: Economics, Politics, and the Institutions in the South, 1865-1965 by Lee J. Alston and Joseph P. Ferrie,” The Independent Review, Vol. IV, No. 3 (Winter 2000), pp. 452-456.

Leuchtenburg, William E. Franklin D. Roosevelt and the New Deal, 1932-1940. New York: Harper Colophon Books, 1963.

—. “The New Deal and the Analogue of War.” In Change and Continuity in Twentieth-Century America, ed. John Braeman, Robert H. Bremner, and Everett Walters. Columbus: Ohio State University Press, 1964.

Libecap, Gary D. “The Political Economy of the Establishment of the Interstate Oil Cartel, 1933-1940.” In Emergence of the Modern Political Economy, ed. Robert Higgs. Greenwich, Conn.: JAI Press, 1985.

Raico, Ralph. “FDR: The Man, the Leader, the Legacy,” Future of Freedom Foundation, 2001.

Rothbard, Murray N. “Herbert Hoover and the Myth of Laissez-Faire.” In A New History of Leviathan: Essays on the Rise of the American Corporate State, ed. Ronald Radosh and Murray N. Rothbard. New York: E. P. Dutton, 1972.

Rutten, Andrew. “Review of the book Rethinking the New Deal Court: The Structure of a Constitutional Revolution by Barry Cushman,” The Independent Review, Vol. VI, No. 1 (Summr 2001), pp. 144-147.

Wallis, John Joseph. "The Birth of the Old Federalism: Financing the New Deal, 1932-1940." Journal of Economic History 44 (March 1984).

—. “Review of the book State and Party in America's New Deal by Kenneth Finegold and Theda Skocpol,” The Independent Review, Vol. I, No. 2 (Fall 1996), pp. 295-297.

—. “Why 1933? The Origins and Timing of National Government Growth.” In Emergence of the Modern Political Economy, ed. Robert Higgs. Greenwich, Conn.: JAI Press, 1985.

Wallis, John Joseph, and Daniel K. Benjamin. “Public Relief and Private Employment in the Great Depression.” Journal of Economic History 41 (March 1981).

Neutrality and “Isolationism”:

Bandow, Doug. “Review of the book Isolationism Reconfigured: American Foreign Policy for a New Century, by Eric Nordlinger,” The Independent Review, Vol. I, No. 1 (Summer 1996), pp. 147-150.

Beale, C.A. The Devil Theory of War: An Inquiry into the Nature of History and the Possibility of Keeping Out of War. New York: Vanguard, 1936.

Beard, Charles A. Giddy Minds and Foreign Quarrels. New York: Macmillan, 1939.

—. A Foreign Policy for America. New York: Alfred A. Knopf, 1940.

—. President Roosevelt and the Coming of the War, 1941: A Study in Appearances and Realities. New Haven, Conn.: Yale University Press, 1948.

Borchard, Edwin M., and W. P. Lage. Neutrality for the United States. New Haven: Yale University Press, 1940.

Butler, General Smedley. War Is a Racket. Costa Mesa, California: Noontide Press, 1991.

Chamberlin, William Henry. “War—Shortcut to Fascism,” American Mercury, Vol. LI, 204 (December 1940), pp. 391-400.

Cole, Wayne S. America First: The Battle Against Intervention, 1940-1941. Madison, Wisc.: University of Wisconsin Press, 1953.

—. Charles A. Lindbergh and the Battle Against American Interventionism. New York: Harcourt Brace Jovanovich, 1974.

—. Roosevelt and the Isolationists, 1934-45. Omaha, Neb.: University of Nebraska Press, 1983.

Dennis, Lawrence. The Dynamics of War and Revolution. New York: Weekly Foreign Letter, 1940.

Doenecke, Justus D. Anti-Intervention: A Bibliographical Introduction to Isolationism and Pacifism from World War I to the Early Cold War. New York: Garland Publishing, 1987.

—. The Battle Against Intervention, 1939-1941. Melbourne, Florida: Krieger Publishing, 1997.

—. “Explaining the Antiwar Movement, 1939-1941: The Next Assignment,” Journal of Libertarian Studies, Vol. 8 No. 1.

—. In Danger Undaunted: the Anti-Interventionist Movement of 1940-41 as Revealed in the Papers of the America First Committee. Stanford, Calif.: Hoover Institution Press, 1990.

—. “The Debate Over Coercion: The Dilemma of America’s Pacifists and the Manchurian Crisis,” Peace and Change, Vol. II, No. 1 (Spring 1974), pp. 47-52.

—. From Isolation to War, 1931-1941. Wheeling, Ill.: Harlan Davidson, 1991.

—. The Literature of Isolationism: Non Interventionist Scholarship 1930-1972. Lake George, CO: Ralph Myles Publisher, 1972.

—. The New Deal and Its Critics. Melbourne, Florida: Krieger Publishing, 2002.

—. Not to the Swift: the Old Isolationists in the Cold War Era. Lewisburg, Penn.: Bucknell University Press, 1979.

—. Storm on the Horizon: The Challenge to American Intervention, 1939-1941. Lanham, Maryland: Rowman & Littlefield, 2000.

Fleming, Thomas J. The New Dealers’ War: Franklin D. Roosevelt and the War Within the War. New York: Basic Books, 2001.

Jonas, Manfred. Isolationism in America, 1935-1941. Ithaca, N.Y.: Cornell University Press, 1966.

—. “Pro-Axis Sentiment and American Isolationism,” The Historian, 29 (February 1967), 221-237.

Knight, Bruce. How to Run a War. New York: Arno Press, 1972.

MacDonald, Dwight. Memoirs of a Revolutionist. New York: Meridian Books, 1958.

McElroy, Wendy. “War’s Other Casualty,” The Freeman, July 1999.

Neilson, Francis. My Life in Two Worlds. Appleton, Wisc.: C.C. Nelson, 1952.

—. How Diplomats Make War. New York: Robert Schalkenbach Foundation, 1984.

—. The Churchill Legend. Appleton, Wisc.: C.C. Nelson, 1954.

—. Churchill’s War Memoirs. Revisionist Press.

—. Churchill and Yalta. Revisionist Press.

—. The Makers of War. Flanders Hall Publishers, 1950.

—. The Tragedy of Europe, 5 Vols. Appleton, Wisc.: C.C. Nelson, 1940-46.

Nordlinger, Eric. Isolationism Reconfigured. Princeton, N.J.: Princeton University Press, 1995.

Page, Kirby. Must We Go To War? A Book for Men with a Subtitle for Women: Must American Women Send Their Men to Fight in Europe or Asia? New York: Farrar & Rinehart, 1937.

Pinckney, Orde S. “William E. Borah: Critic of American Foreign Policy,” Studies on the Left, Vo. I (1960), pp. 48-61.

Raico, Ralph. “On the Brink of World War II: Justus Doenecke’s Storm on the Horizon,” The Independent Review, Vol. VI, No. 4 (Spring 2002), pp. 607-613.

Regnery, Henry. Memoirs of a Dissident Publisher. New York: Harcourt Brace, 1979.The autobiography of the man responsible for publishing many of the major books on World War II revisionism, in contrast to the blackout-efforts of so muh of the mainstream book trade.

Riddle, Wesley Allen. “Review of the book In the Shadow of War: The United States since the 1930s by Michael S. Sherry,” The Independent Review, Vol. I, No. 3 (Winter 1997), pp. 452-456.

Sargent, Porter. Getting Us Into War. Boston: Porter Sargent, 1941.

Stenehjem, Michele Flynn. An American First: John T. Flynn and the America First Committee. New Rochelle, N.Y.: Arlington House, 1976.

Stinnett, Robert B. “Pearl Harbor: Official Lies in an American War Tragedy?”, Independent Policy Forum, The Independent Institute, May 24, 2000. [Forum Anouncement, Forum Audio, Forum Transcript, Order Tapes and Transcripts]

Stromberg, Joseph R. “Mere ‘Isolationism’: The Foreign Policy of the ‘Old Right’,” The Freeman, February 2000.

Viereck, George S. Men Into Beasts. New York: Fawcett, 1952. The second volume of Viereck’s autobiography in which he recalls his efforts to keep America out of war, and the Sedition Trial of 1944-45 attempting to smear him.