Hi Arthur, At 12:46 17/12/02 -0500, you wrote: >Keith said,
>Just as governments produce long and serious unemployment by interference >in things which oughtn't to concern them (as western governments did during >the 1930s), >Arthur suggests, >Are you serious about this? Certainly. >Government should have backed off during the depresssion? Let banks fail? Certainly. Just as many economists are now saying should happen in Japan. >Let the market correct things? Certainly. >No matter how long it takes? How long would governments have taken to cure it? The Great Depression had already been going on for a decade! It was getting even worse in the late '30s and likely to last for years yet had not WWII come along and made millions of jobs. A couple of things that probably would have restored full investment and full employment within five years (say, well before 1935, the year of my birth) would have been for western governments to have floated their currencies and to have stopped trade protection. But they didn't and they were not likely to have done until a whole generation of bankers, economists and politicians had passed away. But Germany achieved it! In the 20s, Germany was in far worse condition than any other developed country. How did it recover to become the most powerful nation in Europe with by far the largest armed forces? They were not allowed by the victors of WWI to have any spare cash so they traded by barter. Oh, how cunning! The Allies hadn't thought of that so they hadn't forbidden them to! However, although barter trading is administratively difficult (that is, to find suitable swops of goods) it is, in effect, Free Trade with absolutely no tariffs! Thus, while the English and Americans and French and so on were injuring themselves by erecting trade barriers against one another and causing tens of millions of their own fit adults to be unemployed, yet the Germans were quietly trading and expanding their economy out of all recognition. Keith ---------------------------------------------------------------------------- -------------- Keith Hudson,6 Upper Camden Place, Bath BA1 5HX, England Tel:01225 312622/444881; Fax:01225 447727; E-mail: [EMAIL PROTECTED] ________________________________________________________________________
