Writing the history of the Great Depression has always been a political act. Lionel Robbins wrote the first book with this title in 1934 when the event was still underway.1 He took the occasion to attack trade unions and unemployment insurance for creating inflexibility in the labor market. Following his friend, the Austrian economist, Ludwig von Mises, who he had worked on translating into English, he slammed state intervention as a cure worse than the disease of Depression itself. When Milton Friedman and Anna J. Schwartz wrote their monumental “monetary history of the United States”2 in 1963, they used it as a cudgel against the then-reigning school of Keynesianism. When Peter Temin responded in the mid-1970s, it was a rearguard action in defense of Keynes in the age of stagflation. Debates about whether the wage demands of workers helped doom the Weimar Republic were implicit critiques of the West German status quo when organized labor and social democracy in the 1970s were at the height of their power. As Margaret Thatcher assaulted industrial unions in the 1980s, social historians paid special attention to the Depression-era suffering of this very group.

The convergence of academic press historiography and real life politics peaked in 2008 when what is routinely called “the worst financial crisis since the Depression” was overseen by a scholar of that earlier economic crisis, secretary of the Federal Reserve, Ben Bernanke. The Great Depression became a “frame of reference” for public debates as different groups made their own cases for measures needed to avert a repeat of what was cast as an apocalypse past (S. 205).

To talk about the Great Depression is to talk about the present moment. In their slim but valuable new volume, the economic historians Jan-Otmar Hesse, Roman Köster and Werner Plumpe introduce us to the range of interpretations cited above and give us a tour through the decade of the 1930s, when much knowledge that seemed eternal proved false and many stable relationships that seemed constant proved fleeting.

Along with the gold standard, long assumed to be the guarantor of stability that ended up being the transmitter of deflation, the most important orthodoxy shattered by the Great Depression was the belief in the “self-healing properties” of the free market (S. 14). Robbins and other liberals who felt that economic health would return once the crisis had purged inefficiencies from the system ended up being wrong. One of the authors’ central theses is that the Great Depression led to a “fundamental new determination of the relationship between state and economy” (S. 178). By this, they mean the government’s newfound obligation to intervene and stimulate demand in times of economic downturn. One might have hoped for more from this broad statement, especially in light of the occasional mentions of the “monetary doctors” dispatched to ailing Australia, China, and elsewhere to advise and often prescribe necessary austerity measures to maintain creditworthiness (S. 160). The work of Patricia Clavin, among others, has shown how the institutions of what are now called international economic governance were pioneered in the interwar period. Other historians, including Daniel Speich Chassé, have shown how economists developed new forms of economic knowledge in this period, including the calculation of GDP, creating a layer of expertise mediating the relationship between state and citizen.3

Attention to such transnational actors would have also helped show more moments of entanglement rather than comparison. As it was, the structure of the book does not differ greatly from Robbins’ 1934 text, following the sequence of seesawing events back and forth across the North Atlantic. Though the authors cite Jürgen Osterhammel on the Great Depression as one of the first truly global occurrences, the promised attention to the world beyond Europe and the U.S. is scant (S. 200). China gets a short section, Africa and India a few pages and, rather shockingly given its importance for the region, Latin America only earns a passing mention.

A more whole-hearted global history of the Great Depression would be a fascinating read, even starting with the label of the event itself. The subtitle of the book, “the world economic crisis” uses the standard German-language term, Weltwirtschaftskrise, which is striking for its immediate attention to an international context, absent from “the Great Depression,” which suggests volume or degree and has no clear geographical referent. The phrase used in Japanese includes the character for “fear” and connotes something closer to “world panic.” For better and worse, the book devotes little time to either larger categories or ground-level experience. While it has five chapters, the third comprises over two thirds of the text, providing an informative, if standard, overview of “the crisis in individual countries.”

The best parallax view offered by the authors is from the perspective of the Soviet Union, where, on paper, the Depression was a time of extraordinary success, with growth rates ranging from seven to 13.6 percent aided by the low price of industrial imports on the world markets and crowds of underemployed advisors seeking sites to ply their expertise. Without losing sight of the devastating human cost of these successes, the authors help make clear why the Soviet beacon could have shone so brightly for so many in a decade of apparent global capitalist crack-up.

The authors point out clearly that the “deglobalization” of the 1930s was actually more of a realignment as currency and trading blocs entrenched empires and created superficially odd bedfellows like Great Britain, Thailand, Estonia and Iran in a sterling bloc and France, Poland and Dutch Indonesia together on gold. How we got from the segmented world of the 1930s to the U.S.-led global order after 1945 is a story only explained by the intervening war. But if the Second World War is a story we turn to repeatedly for moral certainty, Hesse, Köster and Plumpe remind us why the Great Depression remains the site we return to in moments of disorder and doubt. The authors’ own conclusion, that the institutions of the welfare state help moderate the depth of any potential fall, would suggest we live in a world after Robbins and Mises (S. 212). But those arguing to the contrary, that the social state must be shrunk to spur on mobility and competition, prove that, almost a century later, the fights of the 1930s are not over yet.

Notes:
1 Lionel Robbins, The Great Depression, London 1934.
2 Milton Friedman / Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960, Princeton 1963.
3 Patrica Clavin, Securing the World Economy: The Reinvention of the League of Nations, 1920–1946, New York 2013; Daniel Speich Chassé, Die Erfindung des Bruttosozialprodukts. Globale Ungleichheiten in der Wissensgeschichte der Ökonomie, Göttingen 2013.