Depression (of the economic sort)

["Devine, James" <jdevine@xxxxxxx>]

[was: RE: [PEN-L] Hubbert's Trough]

Whereas the standard orthodox analysis sees Smoot-Hawley as a policy sin that could have been avoided if wiser economists had prevailed (as with the MF's famous fall of the US money supply in the 1930s), my analysis _endogenizes_ it: the passing of S-H was part of the world-wide political economy of the 1920s, when the hot war of World War I had been (temporarily) replaced by the competition amongst national capitals using tariffs and the like. These two types of competition were was part of the interregnum, after the British stopped being the world capitalist hegemon and before the US took the reins. 

Though the S-H was an important event, I doubt that it would have caused a trade war and a world depression if the world system hadn't already been sitting on the precipice. 

I also use the S-H  as an argument against Kindleberger's view that the US should have acted as a global leader to stabilize the world economy and avoided such acts (if wiser economists had prevailed, of course). The US economy was much more agricultural than it is today (in terms of employment), and had suffered from the post-WW1 agricultural depression (along with most other countries) so there really wasn't a material basis for the US being Kindlebergian in its actions. 

------------------------
Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine




> -----Original Message-----
> From: Michael Perelman [mailto:michael@xxxxxxxxxxxxxxxxx]
> Sent: Thursday, June 03, 2004 9:19 AM
> To: PEN-L@xxxxxxxxxxxxxxxx
> Subject: Re: [PEN-L] Hubbert's Trough
> 
> 
> So you have accepted the Smoot Hawley thesis after all?
> 
> On Thu, Jun 03, 2004 at 09:09:11AM -0700, Devine, James wrote:
> > Michael Perelman writes: >We economists have not settled on 
> the cause of the Great Depression yet...<
> >
> > we haven't??
> > http://bellarmine.lmu.edu/~jdevine/depr\D0.html
> >
> > ;-)
> > jd
> 
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
> 
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu
>