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The American Economy in the Twentieth Century

Finally, A Free-Market Economic History Textbook


Uncork the champagne! It’s time to celebrate! The first free-market economic history textbook is now available for college students. The American Economy in the Twentieth Century is written by Gene Smiley, economics professor at Marquette University, and published by SouthWestern, a major college textbook publisher.

There is much to applaud. Smiley’s textbook is lucid, interesting, well-documented, and replete with charts and graphs.

Professor Smiley views it as a supplemental text because it covers only the twentieth century. But, as any student knows, pre-twenticth-century economic history is somewhat dry, and most professors don’t spend enough time on the twentieth century, where the hot issues of economic theory and government policies surface.

Smiley doesn’t just recount economic history, he addresses all the major debates. He does a masterful job of expounding on the theories and policies surrounding the two world wars, the Roaring Twenties, the Great Depression, and the post-war modern economy, giving fair treatment to all points of view.

What makes this text so different from all others? Lots of things. I particularly like chapters six through eight on government intervention in the economy during the critical period 1920-40.

•       Chapter 6, “The Role of Government, 1920-1940: Monetary and Fiscal Policies and the New Deal,” reveals new research on the booming 1920s, the evolution of monetary policy under a flawed international gold standard, and the pros and cons of the New Deal.

•       Chapter 7, “What Caused the Great Depression?,” is the most comprehensive piece ever written on the subject. It includes a full Austrian explanation, normally missing from standard textbooks. But it doesn’t shortchange Monetarist, Keynesian, and other explanations. Instructors need not be concerned about bias in this textbook. Smiley really does offer equal time for all schools of thought. Moreover, he doesn’t ignore any of his critics, a chronic disease among many academics.

•       Chapter 8, “The American Economy During the 1940s,” includes new research questioning the magnitude of the recovery during World War II, based on breakthrough research by historian Robert Higgs and others.

In addition, Smiley gives an objective analysis of public-sector unionism, the agricultural shortages and energy crises of the 1970s, and the farm debt and banking crises. In all these controversial issues, the author focuses on the role of government.

I also found fascinating his extensive coverage of the dramatic changes in technology and industry during the twentieth century. He has an entire chapter on the communications revolution, including radio and TV, often overlooked in mainstream textbooks. Another chapter is devoted to developments in retail trade. He covers finance, banking, international trade, labor, agriculture, and manufacturing. Finally, Smiley has a thought-provoking chapter on the distribution of income.

I recommend this textbook to all economic historians and students who desire a full and fair examination of what Paul Johnson labels the century of “superpower and genocide” and Carroll Quigley calls the generation of “tragedy and hope.”


August 1995

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April 2014

Around the world, people are struggling to throw off authoritarianism, with deeply mixed results. From Egypt to Venezuela, determined people build networks to overthrow their regimes, but as yet we have not learned to live without Leviathan. In this issue, Michael Malice and Gary Dudney discuss their glimpses inside totalitarian regimes, while Sarah Skwire and Michael Nolan look at how totalitarian regimes grind down the individual--and how individuals fight back. Plus, Jeffrey Tucker identifies a strain in libertarianism that, left unchecked, could reduce even our vibrant movement to something that is analogous to the grim aesthetic of architectural brutalism. The struggle for our lives and freedom is a struggle for beauty; it begins inside each of us.
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