The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline. The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). From there, it quickly spread to almost every country in the world.

The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most.

Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the start of World War II.

Start of the Great Depression

Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday. However, some dispute this conclusion, and see the stock crash as a symptom, rather than a cause, of the Great Depression. Even after the Wall Street Crash of 1929, optimism persisted for some time; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again." In fact, the stock market turned upward in early 1930, returning to early 1929 levels by April. This was still almost 30% below the peak of September 1929. Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. On the other hand, consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent. Likewise, beginning in the summer of 1930, a severe drought ravaged the agricultural heartland of the USA.

By mid-1930, interest rates had dropped to low levels. But expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed. By May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, although wages held steady in 1930; but then a deflationary spiral started in 1931. Conditions were worse in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the US economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late 1930, a steady decline in the world economy had set, which did not reach bottom until 1933.

Economic indicators

Change in economic indicators 1929–32

	USA	Britain	France	Germany
Industrial production	−46%	−23	−24	−41
Wholesale prices	−32%	−33	−34	−29
Foreign trade	−70%	−60	−54	−61
Unemployment	+607%	+129	+214	+232

Causes

There were multiple causes for the first downturn in 1929. These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash. In contrast, economists (such as Barry Eichengreen, Milton Friedman and Peter Temin) point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, as well as Britain's decision to return to the Gold Standard at pre–World War I parities (US$4.86:£1).

Recessions and business cycles are thought to be a normal part of living in a world of inexact balances between supply and demand. What turns a normal recession or 'ordinary' business cycle into an actual depression is a subject of much debate and concern. Scholars have not agreed on the exact causes and their relative importance. Moreover, the search for causes is closely connected to the issue of avoiding future depressions.

Thus, the personal political and policy viewpoints of scholars greatly color their analysis of historic events occurring eight decades ago. An even larger question is whether the Great Depression was primarily a failure on the part of free markets or, alternately, a failure of government efforts to regulate interest rates, curtail widespread bank failures, and control the money supply. Those who believe in a larger economic role for the state believe that it was primarily a failure of free markets, while those who believe in a smaller role for the state believe that it was primarily a failure of government that compounded the problem.

Current theories may be broadly classified into two main points of view and several heterodox points of view. First, there are demand-driven theories, most importantly Keynesian economics, but also including those who point to the breakdown of international trade, and Institutional economists who point to underconsumption and over-investment (causing an economic bubble), malfeasance by bankers and industrialists, or incompetence by government officials. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending. Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets. Holding money became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand.

Secondly, there are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve), caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression. Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms.

Lastly, there are various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists. For example, some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression. The Austrian school of economics focuses on the macroeconomic effects of money supply, and how central banking decisions can lead to over-investment (economic bubble).

Demand-driven

Keynesian

British economist John Maynard Keynes argued in ''General Theory of Employment Interest and Money'' that lower aggregate expenditures in the economy contributed to a massive decline in income and to employment that was well below the average. In such a situation, the economy reached equilibrium at low levels of economic activity and high unemployment. Keynes' basic idea was simple: to keep people fully employed, governments have to run deficits when the economy is slowing, as the private sector would not invest enough to keep production at the normal level and bring the economy out of recession. Keynesian economists called on governments during times of economic crisis to pick up the slack by increasing government spending and/or cutting taxes.

As the Depression wore on, Franklin D. Roosevelt tried public works, farm subsidies, and other devices to restart the economy, but never completely gave up trying to balance the budget. According to the Keynesians, this improved the economy, but Roosevelt never spent enough to bring the economy out of recession until the start of World War II.

Breakdown of international trade

Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade. Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. While foreign trade was a small part of overall economic activity in the U.S. and was concentrated in a few businesses like farming, it was a much larger factor in many other countries. The average ''ad valorem'' rate of duties on dutiable imports for 1921–1925 was 25.9% but under the new tariff it jumped to 50% in 1931–1935.

In dollar terms, American exports declined from about $5.2 billion in 1929 to $1.7 billion in 1933; but prices also fell, so the physical volume of exports only fell by half. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. According to this theory, the collapse of farm exports caused many American farmers to default on their loans, leading to the bank runs on small rural banks that characterized the early years of the Great Depression.

Debt deflation

Irving Fisher argued that the predominant factor leading to the Great Depression was over-indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles. He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows: #Debt liquidation and distress selling #Contraction of the money supply as bank loans are paid off #A fall in the level of asset prices #A still greater fall in the net worths of business, precipitating bankruptcies #A fall in profits #A reduction in output, in trade and in employment. #Pessimism and loss of confidence #Hoarding of money #A fall in nominal interest rates and a rise in deflation adjusted interest rates.

During the Crash of 1929 preceding the Great Depression, margin requirements were only 10%. Brokerage firms, in other words, would lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets. Outstanding debts became heavier, because prices and incomes fell by 20–50% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday.

Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated.

The liquidation of debt could not keep up with the fall of prices which it caused. The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings. The very effort of individuals to lessen their burden of debt effectively increased it. Paradoxically, the more the debtors paid, the more they owed. This self-aggravating process turned a 1930 recession into a 1933 great depression.

Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression originated by Fisher.

Monetarist

Monetarists, including Milton Friedman and current Federal Reserve System chairman Ben Bernanke, argue that the Great Depression was mainly caused by monetary contraction, the consequence of poor policymaking by the American Federal Reserve System and continued crisis in the banking system. In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929–1933, thereby transforming a normal recession into the Great Depression. Friedman argued that the downward turn in the economy, starting with the stock market crash, would have been just another recession. However, the Federal Reserve allowed some large public bank failures – particularly that of the New York Bank of the United States – which produced panic and widespread runs on local banks, and the Federal Reserve sat idly by while banks collapsed. He claimed that, if the Fed had provided emergency lending to these key banks, or simply bought government bonds on the open market to provide liquidity and increase the quantity of money after the key banks fell, all the rest of the banks would not have fallen after the large ones did, and the money supply would not have fallen as far and as fast as it did. With significantly less money to go around, businessmen could not get new loans and could not even get their old loans renewed, forcing many to stop investing. This interpretation blames the Federal Reserve for inaction, especially the New York branch.

One reason why the Federal Reserve did not act to limit the decline of the money supply was regulation. At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act, which required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit was in the form of Federal Reserve demand notes. A "promise of gold" is not as good as "gold in the hand", particularly when they only had enough gold to cover 40% of the Federal Reserve Notes outstanding. During the bank panics a portion of those demand notes were redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit. On April 5, 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coins and bullion illegal, reducing the pressure on Federal Reserve gold.

New classical approach

Recent work from a neoclassical perspective focuses on the decline in productivity that caused the initial decline in output and a prolonged recovery due to policies that affected the labor market. This work, collected by Kehoe and Prescott, decomposes the economic decline into a decline in the labor force, capital stock, and the productivity with which these inputs are used. This study suggests that theories of the Great Depression have to explain an initial severe decline but rapid recovery in productivity, relatively little change in the capital stock, and a prolonged depression in the labor force. This analysis rejects theories that focus on the role of savings and posit a decline in the capital stock.

Austrian School

Another explanation comes from the Austrian School of economics. Theorists of the "Austrian School" who wrote about the Depression include Austrian economist Friedrich Hayek and American economist Murray Rothbard, who wrote ''America's Great Depression'' (1963). In their view and like the monetarists, the Federal Reserve, which was created in 1913, shoulders much of the blame; but in opposition to the monetarists, they argue that the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a significant economic contraction was inevitable. According to the Austrians, the artificial interference in the economy was a disaster prior to the Depression, and government efforts to prop up the economy after the crash of 1929 only made things worse. According to Rothbard, government intervention delayed the market's adjustment and made the road to complete recovery more difficult.

Inequality

Two economists of the 1920s, Waddill Catchings and William Trufant Foster, popularized a theory that influenced many policy makers, including Herbert Hoover, Henry A. Wallace, Paul Douglas, and Marriner Eccles. It held the economy produced more than it consumed, because the consumers did not have enough income. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression.

According to this view, the root cause of the Great Depression was a global over-investment in heavy industry capacity compared to wages and earnings from independent businesses, such as farms. The solution was the government must pump money into consumers' pockets. That is, it must redistribute purchasing power, maintain the industrial base, but re-inflate prices and wages to force as much of the inflationary increase in purchasing power into consumer spending. The economy was overbuilt, and new factories were not needed. Foster and Catchings recommended federal and state governments start large construction projects, a program followed by Hoover and Roosevelt.

Productivity shock

“It cannot be emphasized too strongly that the [productivity, output and employment] trends we are describing are long-time trends and were thoroughly evident prior to 1929. These trends are in nowise the result of the present depression, nor are they the result of the World War. On the contrary, the present depression is a collapse resulting from these long-term trends.” M. King Hubbert

The first three decades of the 20th century saw economic output surge with electrification, mass production and motorized farm machinery, and because of the rapid growth in productivity there was a lot of excess production capacity and the work week was being reduced.

The dramatic rise in productivity of major industries in the U. S. and the effects of productivity on output, wages and the work week are discussed by a Brookings Institution sponsored book.

Turning point and recovery

Various countries around the world started to recover from the Great Depression at different times. In most countries of the world, recovery from the Great Depression began in 1933. In the U.S., recovery began in the spring of 1933. However, the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933.

There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and the 1937 recession that interrupted it).

The common view among mainstream economists is that Roosevelt's New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of reflation and rising nominal interest rates that Roosevelt's words and actions portended. However, opposition from the new Conservative Coalition caused a rollback of the New Deal policies in early 1937, which caused a setback in the recovery.

According to Christina Romer, the money supply growth caused by huge international gold inflows was a crucial source of the recovery of the United States economy, and that the economy showed little sign of self-correction. The gold inflows were partly due to devaluation of the U.S. dollar and partly due to deterioration of the political situation in Europe. In their book, ''A Monetary History of the United States'', Milton Friedman and Anna J. Schwartz also attributed the recovery to monetary factors, and contended that it was much slowed by poor management of money by the Federal Reserve System. Current Chairman of the Federal Reserve Ben Bernanke agrees that monetary factors played important roles both in the worldwide economic decline and eventual recovery. Bernanke, also sees a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system, and points out that the Depression needs to be examined in international perspective. Economists Harold L. Cole and Lee E. Ohanian, believe that the economy should have returned to normal after four years of depression except for continued depressing influences, and point the finger to the lack of downward flexibility in prices and wages, encouraged by Roosevelt Administration policies such as the National Industrial Recovery Act.

Gold standard

Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible. What policies countries followed after casting off the gold standard, and what results followed varied widely.

Every major currency left the gold standard during the Great Depression. Great Britain was the first to do so. Facing speculative attacks on the pound and depleting gold reserves, in September 1931 the Bank of England ceased exchanging pound notes for gold and the pound was floated on foreign exchange markets.

Great Britain, Japan, and the Scandinavian countries left the gold standard in 1931. Other countries, such as Italy and the U.S., remained on the gold standard into 1932 or 1933, while a few countries in the so-called "gold bloc", led by France and including Poland, Belgium and Switzerland, stayed on the standard until 1935–1936.

According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery. For example, Great Britain and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had a silver standard, almost avoided the depression entirely. The connection between leaving the gold standard as a strong predictor of that country's severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries, including developing countries. This partly explains why the experience and length of the depression differed between national economies.

World War II and recovery

The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression. However, some consider that it did not play a very large role in the recovery, although it did help in reducing unemployment.

The massive rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 finally ended unemployment.

America's entry into the war in 1941 finally eliminated the last effects from the Great Depression and brought the unemployment rate down below 10%. In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.

Effects

The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagogues—the most infamous being Adolf Hitler—setting the stage for World War II in 1939.

Australia

Australia's extreme dependence on agricultural and industrial exports meant it was one of the hardest-hit countries in the Western world. Falling export demand and commodity prices placed massive downward pressures on wages. Further, unemployment reached a record high of 29% in 1932, with incidents of civil unrest becoming common. After 1932, an increase in wool and meat prices led to a gradual recovery.

Canada

Harshly affected by both the global economic downturn and the Dust Bowl, Canadian industrial production had fallen to only 58% of the 1929 level by 1932, the second lowest level in the world after the United States, and well behind nations such as Britain, which saw it fall only to 83% of the 1929 level. Total national income fell to 56% of the 1929 level, again worse than any nation apart from the United States. Unemployment reached 27% at the depth of the Depression in 1933. During the 1930s, Canada employed a highly restrictive immigration policy.

Chile

Chile initially felt the impact of the Great Depression in 1930, when GDP dropped 14%, mining income declined 27%, and export earnings fell 28%. By 1932, GDP had shrunk to less than half of what it had been in 1929, exacting a terrible toll in unemployment and business failures. The League of Nations labeled Chile the country hardest hit by the Great Depression because 80% of government revenue came from exports of copper and nitrates, which were in low demand.

Influenced profoundly by the Great Depression, many national leaders promoted the development of local industry in an effort to insulate the economy from future external shocks. After six years of government austerity measures, which succeeded in reestablishing Chile's creditworthiness, Chileans elected to office during the 1938–58 period a succession of center and left-of-center governments interested in promoting economic growth by means of government intervention.

Prompted in part by the devastating earthquake of 1939, the Popular Front government of Pedro Aguirre Cerda created the Production Development Corporation (Corporación de Fomento de la Producción, CORFO) to encourage with subsidies and direct investments an ambitious program of import substitution industrialization. Consequently, as in other Latin American countries, protectionism became an entrenched aspect of the Chilean economy.

France

The Depression began to affect France around 1931. France's relatively high degree of self-sufficiency meant the damage was considerably less than in nations like Germany. However, hardship and unemployment were high enough to lead to rioting and the rise of the socialist Popular Front.

Germany

Germany's Weimar Republic was hit hard by the depression, as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities, and the political system veered toward extremism. The unemployment rate reached nearly 30% in 1932. Repayment of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932. By that time, Germany had repaid ⅛ of the reparations. Hitler's Nazi Party came to power in January 1933.

Japan

The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. However, Japan's Finance Minister Takahashi Korekiyo was the first to implement what have come to be identified as Keynesian economic policies: first, by large fiscal stimulus involving deficit spending; and second, by devaluing the currency. Takahashi used the Bank of Japan to sterilize the deficit spending and minimize resulting inflationary pressures. Econometric studies have identified the fiscal stimulus as especially effective.

The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending however, proved to be most profound. The deficit spending went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934, Takahashi realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the Army, culminating in his assassination in the course of the February 26 Incident. This had a chilling effect on all civilian bureaucrats in the Japanese government. From 1934, the military's dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which would remain a problem until the end of World War II.

The deficit spending had a transformative effect on Japan. Japan's industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japan's automakers, like Toyota, have their roots in the textile industry). By 1940 light industry had been displaced by heavy industry as the largest firms inside the Japanese economy.

Latin America

[[File:Dust Bowl - Dallas, South Dakota 1936.jpg|thumb|right|Buried machinery in a barn lot; South Dakota, May 1936. The Dust Bowl on the Great Plains coincided with the Great Depression. ]] Because of high levels of U.S. investment in Latin American economies, they were severely damaged by the Depression. Within the region, Chile, Bolivia and Peru were particularly badly affected.

Netherlands

From roughly 1931–1937, the Netherlands suffered a deep and exceptionally long depression. This depression was partly caused by the after-effects of the Stock Market Crash of 1929 in the U.S., and partly by internal factors in the Netherlands. Government policy, especially the very late dropping of the Gold Standard, played a role in prolonging the depression. The Great Depression in the Netherlands led to some political instability and riots, and can be linked to the rise of the Dutch national-socialist party NSB. The depression in the Netherlands eased off somewhat at the end of 1936, when the government finally dropped the Gold Standard, but real economic stability did not return until after World War II.

South Africa

As world trade slumped, demand for South African agricultural and mineral exports fell drastically. The Carnegie Commission on Poor Whites had concluded in 1931 that nearly ⅓ of Afrikaners lived as paupers. It is believed that the social discomfort caused by the depression was a contributing factor in the 1933 split between the "gesuiwerde" (purified) and "smelter" (fusionist) factions within the National Party and the National Party's subsequent fusion with the South African Party. Eventually, the gesuiwerde faction of Daniel Malan would go on to form its own party and take over the government after the 1948 election, bringing about the apartheid system of racial segregation which would see an end only in 1994.

Soviet Union

Having removed itself from the capitalist world system both by choice and as a result of efforts of the capitalist powers to isolate it, the Great Depression had little effect on the Soviet Union. A Soviet trade agency in New York advertised 6,000 positions and received more than 100,000 applications. Its apparent immunity to the Great Depression seemed to validate the theory of Marxism and contributed to Socialist and Communist agitation in affected nations.

Sweden

Taking place in the midst of short-lived government and less-than-a-decade old Swedish democracy, events such as those surrounding Ivar Kreuger (who eventually committed suicide) remains infamous in Swedish history. Eventually, the Social Democrats under Per Albin Hansson would form its first long-lived government in 1932 based on strong interventionist and welfare state policies, monopolizing the office of Prime Minister until 1976 with the sole and short-lived exception of Axel Pehrsson-Bramstorp's "summer cabinet" in 1936. During forty years of hegemony, it was the most successful political party in the history of Western liberal democracy.

Thailand

In Thailand, then known as the kingdom of Siam, the Great Depression contributed to the end of the absolute monarchy of King Rama VII in the Siamese revolution of 1932.

United Kingdom

The effects on the northern industrial areas of Britain were immediate and devastating, as demand for traditional industrial products collapsed. By the end of 1930 unemployment had more than doubled from 1 million to 2.5 million (20% of the insured workforce), and exports had fallen in value by 50%. In 1933, 30% of Glaswegians were unemployed due to the severe decline in heavy industry. In some towns and cities in the north east, unemployment reached as high as 70% as ship production fell 90%. The National Hunger March of September–October 1932 was the largest of a series of hunger marches in Britain in the 1920s and 1930s. About 200,000 unemployed men were sent to the work camps, which continued in operation until 1939.

In the less industrial Midlands and South of England, the effects were short-lived and the later 1930s were a prosperous time. Growth in modern manufacture of electrical goods and a boom in the motor car industry was helped by a growing southern population and an expanding middle class. Agriculture also saw a boom during this period.

United States

President Herbert Hoover started numerous programs, all of which failed to reverse the downturn. In June 1930 Congress approved the Smoot–Hawley Tariff Act which raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression. In 1931 Hoover urged the major banks in the country to form a consortium known as the National Credit Corporation (NCC). By 1932, unemployment had reached 23.6%, and it peaked in early 1933 at 25%, drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed. Hundreds of thousands of Americans found themselves homeless, and began congregating in shanty towns - dubbed "Hoovervilles" - that began to appear across the country. In response, President Hoover and Congress approved the Federal Home Loan Bank Act, to spur new home construction, and reduce foreclosures. The final attempt of the Hoover Administration to stimulate the economy was the passage of the Emergency Relief and Construction Act (ERA) which included funds for public works programs such as dams and the creation of the Reconstruction Finance Corporation (RFC) in 1932. The RFC's initial goal was to provide government-secured loans to financial institutions, railroads and farmers. Quarter by quarter the economy went downhill, as prices, profits and employment fell, leading to the political realignment in 1932 that brought to power Franklin Delano Roosevelt.

Shortly after President Roosevelt was inaugurated in 1933, drought and erosion combined to cause the Dust Bowl, shifting hundreds of thousands of displaced persons off their farms in the Midwest. From his inauguration onward, Roosevelt argued that restructuring of the economy would be needed to prevent another depression or avoid prolonging the current one. New Deal programs sought to stimulate demand and provide work and relief for the impoverished through increased government spending and the institution of financial reforms. The Securities Act of 1933 comprehensively regulated the securities industry. This was followed by the Securities Exchange Act of 1934 which created the Securities and Exchange Commission. Though amended, key provisions of both Acts are still in force. Federal insurance of bank deposits was provided by the FDIC, and the Glass–Steagall Act. The institution of the National Recovery Administration (NRA) remains a controversial act to this day. The NRA made a number of sweeping changes to the American economy until it was deemed unconstitutional by the Supreme Court of the United States in 1935.

Early changes by the Roosevelt administration included:

Instituting regulations to fight deflationary "cut-throat competition" through the NRA.

Setting minimum prices and wages, labor standards, and competitive conditions in all industries through the NRA.

Encouraging unions that would raise wages, to increase the purchasing power of the working class.

Cutting farm production to raise prices through the Agricultural Adjustment Act and its successors.

Forcing businesses to work with government to set price codes through the NRA.

These reforms, together with several other relief and recovery measures, are called the First New Deal. Economic stimulus was attempted through a new alphabet soup of agencies set up in 1933 and 1934 and previously extant agencies such as the Reconstruction Finance Corporation. By 1935, the "Second New Deal" added Social Security (which did not start making large payouts until much later), a jobs program for the unemployed (the Works Progress Administration, WPA) and, through the National Labor Relations Board, a strong stimulus to the growth of labor unions. In 1929, federal expenditures constituted only 3% of the GDP. The national debt as a proportion of GNP rose under Hoover from 20% to 40%. Roosevelt kept it at 40% until the war began, when it soared to 128%.

By 1936, the main economic indicators had regained the levels of the late 1920s, except for unemployment, which remained high at 11%, although this was considerably lower than the 25% unemployment rate seen in 1933. In the spring of 1937, American industrial production exceeded that of 1929 and remained level until June 1937. In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget. The American economy then took a sharp downturn, lasting for 13 months through most of 1938. Industrial production fell almost 30 per cent within a few months and production of durable goods fell even faster. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938. Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production. By May 1938 retail sales began to increase, employment improved, and industrial production turned up after June 1938. After the recovery from the Recession of 1937–1938, conservatives were able to form a bipartisan conservative coalition to stop further expansion of the New Deal and, when unemployment dropped to 2% in the early 1940s, they abolished WPA, CCC and the PWA relief programs. Social Security, however, remained in place.

Political consequences

The crisis had many political consequences, among which was the abandonment of classic economic liberal approaches, which Roosevelt replaced in the U.S. with Keynesian policies. These policies magnified the role of the federal government in the national economy. Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a socialist state. The Great Depression was a main factor in the implementation of social democracy and planned economies in European countries after World War II (see Marshall Plan). Although Austrian economists had challenged Keynesianism since the 1920s, it was not until the 1970s, with the influence of Milton Friedman that the Keynesian approach was politically questioned.

Literature

The Great Depression has been the subject of much writing, as authors have sought to evaluate an era that caused financial as well as emotional trauma. Perhaps the most noteworthy and famous novel written on the subject is ''The Grapes of Wrath'', published in 1939 and written by John Steinbeck, who was awarded both the Nobel Prize for literature and the Pulitzer Prize for the work. The novel focuses on a poor family of sharecroppers who are forced from their home as drought, economic hardship, and changes in the agricultural industry occur during the Great Depression. Steinbeck's ''Of Mice and Men'' is another important novel about a journey during the Great Depression. Additionally, Harper Lee's ''To Kill a Mockingbird'' is set during the Great Depression. Margaret Atwood's Booker prize-winning ''The Blind Assassin'' is likewise set in the Great Depression, centering on a privileged socialite's love affair with a Marxist revolutionary. The era spurred the resurgence of social realism, practiced by many who started their writing careers on relief programs, especially the Federal Writers' Project in the U.S.

Naming

The term "The Great Depression" is most frequently attributed to British economist Lionel Robbins, whose 1934 book ''The Great Depression'' is credited with formalizing the phrase, though Hoover is widely credited with popularizing the term, informally referring to the downturn as a depression, with such uses as "Economic depression cannot be cured by legislative action or executive pronouncement", (December 1930, Message to Congress) and "I need not recount to you that the world is passing through a great depression", (1931).

The term "depression" to refer to an economic downturn dates to the 19th century, when it was used by varied Americans and British politicians and economists. Indeed, the first major American economic crisis, the Panic of 1819, was described by then-president James Monroe as "a depression", and the most recent economic crisis, the Depression of 1920–21, had been referred to as a "depression" by then president Calvin Coolidge. However, ''financial'' crises were traditionally referred to as "panics", most recently the major Panic of 1907, and the minor Panic of 1910–1911, though the 1929 crisis was called "The Crash", and the term "panic" has since fallen out of use. At the time of the Great Depression, the term "The Great Depression" was already used to referred to the period 1873–96 (in the United Kingdom), or more narrowly 1873–79 (in the United States), which has retroactively been renamed the Long Depression.

Other "great depressions"

Other economic downturns have been called a "great depression", but none had been as widespread, or lasted for so long. Various nations have experienced brief or extended periods of economic downturns, which were referred to as "depressions", but none have had such a widespread global impact.

British economic historians used the term "great depression" to describe British conditions in the late 19th century, especially in agriculture, 1873–1896, a period now referred to as the Long Depression.

The fall of communism in the Soviet Union led to a severe economic crisis and catastrophic fall in the standards of living in the 1990s in the former Eastern Bloc, most notably, in post-Soviet states, that was almost twice as intense as the Great Depression had been in the countries of Western Europe and the U.S. in the 1930s. Even before Russia's financial crisis of 1998, Russia's GDP was half of what it had been in the early 1990s, and some populations are still poorer as of 2009 than they were in 1989, including Ukraine, Moldova, Serbia, Central Asia, and the Caucasus.

Some journalists and economists have taken to calling the late-2000s recession the "Great Recession" in allusion to the Great Depression.

See also

Aftermath of World War I

Cities in the Great Depression

Economic collapse

Entertainment during the Great Depression

Great Contraction

The Dust Bowl

References

Further reading

Ambrosius, G. and W. Hibbard, ''A Social and Economic History of Twentieth-Century Europe'' (1989)

Brown, Ian. ''The Economies of Africa and Asia in the inter-war depression'' (1989)

Davis, Joseph S., ''The World Between the Wars, 1919–39: An Economist's View'' (1974)

Eichengreen, Barry. ''Golden fetters: The gold standard and the Great Depression, 1919–1939.'' 1992.

Eichengreen, Barry, and Marc Flandreau; ''The Gold Standard in Theory and History'' 1997 online version

Feinstein. Charles H. ''The European economy between the wars'' (1997)

Friedman, Milton and Anna Jacobson Schwartz. ''A Monetary History of the United States, 1867–1960'' (1963), monetarist interpretation (heavily statistical)

Galbraith, John Kenneth, ''The Great Crash, 1929'' (1954)

Garraty, John A., ''The Great Depression: An Inquiry into the causes, course, and Consequences of the Worldwide Depression of the Nineteen-Thirties, as Seen by Contemporaries and in Light of History'' (1986)

Garraty John A. ''Unemployment in History'' (1978)

Garside, William R. ''Capitalism in crisis: international responses to the Great Depression'' (1993)

Goldston, Robert, ''The Great Depression: The United States in the Thirties'' (1968)

Haberler, Gottfried. ''The world economy, money, and the great depression 1919–1939'' (1976)

Hall Thomas E. and J. David Ferguson. ''The Great Depression: An International Disaster of Perverse Economic Policies'' (1998)

Kaiser, David E. ''Economic diplomacy and the origins of the Second World War: Germany, Britain, France and Eastern Europe, 1930–1939'' (1980)

Keynes, John Maynard. "The World's Economic Outlook", ''Atlantic'' (May 1932), online edition

Kindleberger, Charles P. ''The World in Depression, 1929–1939'' (1983)

Gernot Kohler and Emilio José Chaves (Editors) "Globalization: Critical Perspectives" Hauppauge, New York: Nova Science Publishers ISBN 1-59033-346-2. With contributions by Samir Amin, Christopher Chase Dunn, Andre Gunder Frank, Immanuel Wallerstein

League of Nations, ''World Economic Survey 1932–33'' (1934)

Madsen, Jakob B. "Trade Barriers and the Collapse of World Trade during the Great Depression", ''Southern Economic Journal'', Southern Economic Journal 2001, 67(4), 848–868 online at JSTOR.

Donald Markwell, ''John Maynard Keynes and International Relations: Economic Paths to War and Peace'', Oxford University Press (2006).

Mitchell, Broadus. ''Depression Decade: From New Era through New Deal, 1929–1941'' (1947), 462pp; thorough coverage of the U.S.. economy

Mundell, R. A. "A Reconsideration of the Twentieth Century", ''The American Economic Review'' Vol. 90, No. 3 (Jun., 2000), pp. 327–340 online version

Rothermund, Dietmar. ''The Global Impact of the Great Depression'' (1996)

Tausch, Arno, with Christian Ghymers. "From the "Washington" towards a "Vienna Consensus"? A quantitative analysis on globalization, development and global governance". Hauppauge, N.Y.: Nova Science Publishers, 2007.

Tausch, Arno and Almas Heshmati (Eds.) "Roadmap to Bangalore? Globalization, the EU's Lisbon Process and the Structures of Global Inequality" Hauppauge, N.Y.: Nova Science Publishers, 2008, with contributions by Franco Modigliani et al..

Taylor, David A. ''Soul of a People: The WPA Writers' Project Uncovers Depression America''. Hoboken, N.J.: Wiley & Sons, 2009.

Tipton, F. and R. Aldrich, ''An Economic and Social History of Europe, 1890–1939'' (1987)

:''For US specific references, please see complete listing in the Great Depression in the United States article.''

External links

Rare Color Photos from the Great Depression – slideshow by ''The Huffington Post''

EH.net, "An Overview of the Great Depression", by Randall Parker.

America in the 1930s Extensive library of projects on America in the Great Depression from American Studies at the University of Virginia

The 1930s Timeline year by year timeline of events in science and technology, politics and society, culture and international events with embedded audio and video. AS@UVA

Great Myths of the Great Depression by Lawrence Reed

Franklin D. Roosevelt Library & Museum for copyright-free photos of the period

An Age of Lost Innocence: Childhood Realities and Adult Fears in the Depression American Studies at the University of Virginia

Great Depression in the Deep South

Soul of a People documentary on Smithsonian Networks

The Great Depression at the History Channel

Category:Business cycle Category:Financial crises Category:1930s economic history

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This is a list of people whose names in English are commonly appended with the phrase "''the Great''", or who were called that or an equivalent phrase in their own language. Other languages have their own suffixes such as ''e Bozorg'' and ''e azam'' in Persian and Urdu respectively.

In Persia, the title "the Great" at first seems to be a colloquial version of the Old Persian title "Great King". This title was first used by the conqueror Cyrus II of Persia.

The Persian title was inherited by Alexander III of Macedon (336–323 BC) when he conquered the Persian Empire, and the epithet "Great" eventually became personally associated with him. The first reference (in a comedy by Plautus) assumes that everyone knew who "Alexander the Great" was; however, there is no earlier evidence that Alexander III of Macedon was called "''the Great''".

The early Seleucid kings, who succeeded Alexander in Persia, used "Great King" in local documents, but the title was most notably used for Antiochus the Great (223–187 BC).

Later rulers and commanders began to use the epithet "the Great" as a personal name, like the Roman general Pompey. Others received the surname retrospectively, like the Carthaginian Hanno and the Indian emperor Ashoka the Great. Once the surname gained currency, it was also used as an honorific surname for people without political careers, like the philosopher Albert the Great.

As there are no objective criteria for "greatness", the persistence of later generations in using the designation greatly varies. For example, Louis XIV of France was often referred to as "The Great" in his lifetime but is rarely called such nowadays, while Frederick II of Prussia is still called "The Great". A later Hohenzollern - Wilhelm I - was often called "The Great" in the time of his grandson Wilhelm II, but rarely later.

Rulers

Abbas I of Persia (1571–1629), Shah of Iran

Akbar (1542–1605), ruler of the Mughal Empire of South Asia, mainly India

Alain I of Albret (1440–1522), French aristocrat

Alexander the Great (356-323 BC), King of Macedonia, Persia, Greece, Egypt, and all of Mesopotamia

Alexander I of Georgia (1386–1446), King of Georgia

Alfonso III of León (c. 848-910), King of León, Galicia and Asturias

Alfred the Great (848/849-899), King of Wessex

Antiochus III the Great (c. 241–187 BC), ruler of the Seleucid Empire

Ashoka the Great (c. 304–232 BC), Indian emperor of the Maurya dynasty

Ashot I of Iberia “the Great”(died 826/830), presiding prince of Iberia (modern Georgia),

Askia Mohammad I (c. 1442–1538), ruler of the Songhai Empire

Bhumibol Adulyadej (born 1927), King of Thailand

Bolesław I Chrobry (967-1025), sometimes called "the Great", first King of Poland

Bruno the Great (925–965), Archbishop of Cologne and Duke of Lotharingia (also listed in the following section)

Buddha Yodfa Chulaloke (1736–1809), founder and ruler of the Rattanakosin Kingdom (in what is now Thailand)

Cnut the Great (c. 985 or 995-1035), King of Denmark, England, Norway and parts of Sweden

Casimir III the Great (1310–1370), King of Poland

Catherine the Great (1729–1796), Empress of Russia

Chandragupta II (reigned 375-413/415), also known as Vikramaditya, ruler of the Gupta empire in India

Charlemagne (died 814), King of the Franks and Emperor of the Romans

Chulalongkorn (1853–1910), King of Siam (now Thailand)

Chlothar II (584-629), King of Neustria and King of the Franks

Conrad, Margrave of Meissen (c. 1097-1157), Margrave of Meissen

Constantine I (c. 272-337), Roman emperor

Cyaxares the Great (c. 625-585 BC), third king of Media

Cyrus the Great (c. 600 BC or 576 BC–530 BC), founder and ruler of the Persian or Achaemenid Empire

Darius the Great (550 – 486 BC), third ruler of the Persian Empire

Devapala (died 850), ruler of the Pala Empire in the Indian subcontinent

Dionysius I, Greek tyrant of Syracuse

Ferdinand I of León and Castile (c. 1015–1065), King of León and Count of Castile

Frederick the Great (1712–1786), King of Prussia

Genghis Khan (1162?-1227), founder and Great Khan of the Mongol Empire

Gero (c. 900–965), ruler of Marca Geronis, a very large march in Europe

Gustavus Adolphus of Sweden (1594–1632), King of Sweden, founder of the Swedish Empire, and noted military leader

Gwanggaeto the Great, King of Goguryeo, one of the Three Kingdoms of Korea

Hanno the Great, the name of three leaders of Carthage, in the 4th, 3rd, and 2nd centuries BC

Henry I, Duke of Burgundy (946–1002)

Henry IV of France (1553–1610), King of France and King of Navarre

Herod the Great (73/74 BC-4 BC), King of Judea

Hugh the Great (898-956), Duke of the Franks and Count of Paris

Hugh Magnus of France (1007–1025), co-King of France

Hugh I, Count of Vermandois (1057–1101)

Humphrey I de Bohun (died c. 1123), Anglo-Norman aristocrat

Ivan III of Russia (1440–1505), Tsar of Russia

John I of Portugal (1358–1433), King of Portugal and the Algarve

John II of Aragon (1398–1479), King of Aragon and, through his wife, King of Navarre

Justinian I (483-565), Byzantine Emperor

Kamehameha I (c. 1758-1819), first King of Hawai'i

Kanishka (died c. 127), ruler of the Kushan Empire in Central Asia and parts of India

Kvirike III of Kakheti (1010–1029), King of Kakheti in eastern Georgia

Kublai Khan (1215–1294), Mongol ruler in the 13th century and Emperor of China; founder of the Yuan Dynasty

Llywelyn the Great (c. 1172–1240), Prince of Gwynedd and de facto ruler of most of Wales

Louis I of Hungary (1326–1382), King of Hungary, Croatia and Poland

Mangrai the Great (1238–1317), Lanna, northern Thailand

Emperor Meiji (1852–1912), Emperor of Japan

Mircea I of Wallachia (1355–1418)

Mithridates II of Parthia (died 88 BC), ruler of the Parthian Empire (in present day Iran)

Mithridates VI of Pontus (134 BC–63 BC), ruler of Pontus and the Bosporan Kingdom

Mstislav I of Kiev (1076–1132), Grand Prince of Kievan Rus

Narai (1633–1688), King of Ayutthaya (in what is now modern Thailand)

Naresuan (1555–1605), King of Ayutthaya

Odo the Great (died c. 735), Duke of Aquitaine

Otto I, Holy Roman Emperor (912-973)

K'inich Janaab' Pakal (603-683), ruler of the Mayan city-state of Palenque

Parakramabahu I of Polonnaruwa (1123–1186), King of Sri Lanka

Peter Krešimir IV of Croatia (died 1075), King of Croatia

Peter the Great (1672–1725), Tsar of Russia

Peter III of Aragon (1239–1285), King of Aragon and King of Sicily

Pompey (106 BC-48 BC), military and political leader of the late Roman Republic, rival of Julius Caesar

Radama I (1793–1828), first king of greater Madagascar

Raja Raja Chola I (c. 947-1014), Indian emperor of the Cholas.

Rajendra Chola I (reigned 1014–1044), Tamil King of India

Ramesses II (reigned 1279 BC – 1213 BC), considered the greatest pharaoh of Ancient Egypt

Ram Khamhaeng (around 1237 to 1247-1298), King of Sukhothai (in present day Thailand)

Ramon Berenguer III, Count of Barcelona (1082–1131), also Count of Provence and various other counties

Rhodri the Great (c. 820–878), King of Gwynedd (in present day Wales)

Roman the Great (after 1160-1205), Grand Prince of Kiev

Saladin (c. 1138-1193), Kurdish Sultan of Egypt and Syria, founder of the Ayyubid dynasty, and victor over the Crusaders

Samudragupta (c. 335–375), ruler of the Gupta empire in the Indian subcontinent

Sancho III of Navarre (c. 992-1035), King of Kingdom of Navarre

Sargon of Akkad (died c. 2215 BC), ruler of the Akkadian Empire

Sejong the Great (1397–1450), Korean king

Shapur II (309-379), king of the Sassanid Empire, Persia

Simeon I of Bulgaria (864/865-927), ruler of the First Bulgarian Empire

Stephen III of Moldavia (1433–1504), Prince of Moldavia (Romania)

Stephen Uroš IV Dušan of Serbia (c. 1308-1355), King of Serbia and Emperor of the Serbs and Greeks

Taksin (1734–1782), King of the Thonburi Kingdom (Thailand)

Timur (1336–1405), better known as Tamerlane, founder of the Timurid Dynasty

Theobald II, Count of Champagne (1090–1151), Count of Blois and of Chartres as Theobald IV, Count of Champagne and of Brie

Theodoric the Great (454-526), King of the Ostrogoths, regent of the Visigoths and a viceroy of the Byzantine Empire

Theodosius I (347-395), Roman emperor

Tigranes the Great (140-55 BC), Emperor of Armenia

Tiridates III of Armenia (285-339), King of Armenia

Umar (c. 586 to 590–644), second caliph of the Muslim Empire

Valdemar I of Denmark (1131–1182), King of Denmark

Valentinian I (364-375), Roman Emperor

Vladimir I of Kiev (c. 958-1015), ruler of Kievan Rus

Vytautas (c. 1350-1430), archduke of the Lithuanian Grand Duchy

William I, Count of Burgundy (1020–1087), Count of Burgandy and Mâcon

William V, Duke of Aquitaine (969-1030), also Count of Poitou

Xerxes I (519-465 BC), King of Kings of the Achaemenid Empire (Persia)

Yu the Great (c. 2200-2100 BC), legendary ruler in ancient China

Religious figures

Abraham the Great of Kashkar (ca. 492-586), monk and saint of the Assyrian Church of the East

Abraham Kidunaia (died c. 366, hermit, priest, and Christian saint of Mesopotamia

Albertus Magnus (1193/1206–1280), medieval German philosopher and theologian

Anthony the Great (c. 251–356), early Christian saint of Egypt

Babai the Great (c. 551–628), Assyrian church leader

Basil of Caesarea (330-379), Greek bishop and theologian

Bruno the Great (925–965), Archbishop of Cologne and Duke of Lotharingia (also listed in the previous section)

Euthymius the Great (377-473), abbot and Roman Catholic and Eastern Orthodox saint

Gertrude the Great (1256-c. 1302), German Benedictine, mystic, theologian and Roman Catholic saint

Pope Gregory I (c. 540-604)

Hiyya the Great, 3rd-century rabbi, Palestine

Pope John Paul II (1920–2005)

Pope Leo I (c. 391 or 400-461)

Macarius of Egypt (c. 300-391), Egyptian hermit

Pope Nicholas I (c. 800-867)

Photius I of Constantinople (c. 810–c. 893), Eastern Orthodox saint and Patriarch of Constantinople

William of Maleval (died 1157), founder of the Catholic congregation of Williamites

Other

Beli Mawr, a figure in medieval Welsh literature and genealogies

Emmy the Great, folk singer

Matteo Rosso the Great, Roman politician and father of Pope Nicholas III

Prokop the Great, Hussite general in Bohemia

See also

Epithet

List of monarchs by nickname

List of nicknames of European Royalty and Nobility: G-I

James, son of Zebedee, also known as James the Greater, one of the twelve apostles of Jesus

Ajax (mythology), called Ajax the Greater

Notes

Category:Monarchs Great, List of people known as The Category:Greatest Nationals Category:Epithets

bs:Spisak osoba znanih kao Veliki id:Daftar tokoh dengan gelar yang Agung jv:Daftar pamimpin ingkang dipun paringi julukan Ingkang Agung la:Magnus lt:Sąrašas:Žmonės, vadinami Didžiaisiais ja:称号に大が付く人物の一覧 ru:Великий (прозвище) sl:Seznam ljudi z vzdevkom Veliki sv:Lista över personer kallade den store th:รายพระนามกษัตริย์ที่ได้รับสมัญญานามมหาราช vi:Đại đế

Coordinates	56°09′″N40°25′″N
name	Milton Friedman
school tradition	Chicago School of Economics
color	maroon
birth date	July 31, 1912
birth place	Brooklyn, New York
death date	November 16, 2006
death place	San Francisco, California
nationality	American
institution	Hoover Institution (1977–2006)University of Chicago (1946–77)Columbia University (1937–41, 1943–45, 1964–65)NBER (1937–40)
field	Economics
alma mater	Columbia University (Ph.D.), 1946, University of Chicago (M.A.), 1933 Rutgers University (B.A.), (1932)| influences Adam Smith, Irving Fisher, Frank Knight, Murray Rothbard, Jacob Viner, Harold Hotelling, Arthur Burns, Friedrich Hayek, Homer Jones, Ludwig von Mises, Henry Simons, George Stigler
opposed	John Maynard Keynes, John Kenneth Galbraith, Murray Rothbard
influenced	David D. Friedman, Anna J. Schwartz, Ben Bernanke, Gary Becker, Thomas Sowell, Harry Markowitz, Chicago Boys, William F. Buckley, Jr., Cato Institute
contributions	Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman test
awards	John Bates Clark Medal (1951)Nobel Memorial Prize in Economics (1976)Presidential Medal of Freedom (1988)National Medal of Science (1988)
signature	}}

Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences.

Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He was an economic advisor to U.S. President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. Milton Friedman's works, which include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. ''The Economist'' described him as "the most influential economist of the second half of the 20th century…possibly of all of it."

Friedman was originally a Keynesian, a supporter of the New Deal and an advocate of government intervention in the economy. However, his 1950s reinterpretation of the Keynesian consumption function challenged the standard Keynesian model of that time. At the University of Chicago, Friedman became the main advocate opposing activist Keynesian government policies. During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a "natural" rate of unemployment, and argued that governments could not change this natural rate by varying aggregate demand. (Among macroeconomists, the "natural" rate has been increasingly replaced by James Tobin's NAIRU, the non-accelerating inflation rate of unemployment, which is seen as having fewer normative connotations.) He argued that the Phillips Curve was not stable, and predicted that then-existing Keynesian policies would cause high inflation and minimal growth (later termed stagflation). Friedman's claim that monetary policy could have prevented the Great Depression was an attempt to refute the analysis of Keynes, who argued that monetary policy is ineffective during depression conditions, and that large-scale deficit spending by the government is needed to decrease mass unemployment. Though opposed to the existence of the Federal Reserve, Friedman argued that, given that it does exist, a steady, small expansion of the money supply was the only wise policy, and he warned against efforts by a treasury or central bank to do otherwise.

Influenced by his close friend George Stigler, Friedman opposed government regulation of many types. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found The Friedman Foundation for Educational Choice. Friedman's political philosophy, which he considered classically liberal and libertarian, emphasized the advantages of free market economics and the disadvantages of government intervention and regulation, strongly influencing the opinions of American conservatives and libertarians. In his 1962 book ''Capitalism and Freedom'', Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers. His books and essays were well read and were even circulated illegally in Communist countries.

Most economists during the 1960s rejected Friedman's economic views, but since then they have had an increasing international influence. Some of his laissez-faire ideas concerning monetary policy, taxation, privatization and deregulation were used by governments, especially during the 1980s. A combination of his monetary theory in regard to credit and Keynes's belief in deficit spending to stimulate growth has influenced economists such as Ben Bernanke and the Federal Reserve's response to the financial crisis of 2007–10.

Early life

Friedman was born in Brooklyn, New York, to recent Jewish immigrants Jenő Friedman and Sára Landau from Beregszász in Hungary (now Berehove, part of Ukraine), both of whom worked as dry goods merchants. Shortly after Milton's birth, the family relocated to Rahway, New Jersey. A talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.

Friedman graduated from Rutgers University in New Jersey, where he specialized in mathematics and initially intended to become an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression. Friedman did graduate work at the University of Chicago, earning an M.A. in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was at Chicago that Friedman met his future wife, economist Rose Director. During 1933–34 he had a fellowship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He was back in Chicago for 1934–35, spending the year working as a research assistant for Henry Schultz, who was then working on ''Theory and Measurement of Demand''. That year, Friedman formed what would prove to be lifelong friendships with George Stigler and W. Allen Wallis.

Public service

Friedman was initially unable to find academic employment, so during 1935, he followed his friend W. Allen Wallis to Washington, where Franklin D. Roosevelt's New Deal was "a lifesaver" for many young economists. At this stage, Friedman said that he and his wife "regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation," but not "the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration." Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease," arguing that the money supply should simply have been expanded, instead of contracted. In the publication ''Monetary History of the United States'' by Friedman and Anna Schwartz, they argue that the Great Depression was caused by monetary contraction, which was the consequence of poor policymaking by the Federal reserve and the continuous crises of the banking system.

During 1935, he began work for the National Resources Committee, which was then working on a large consumer budget survey. Ideas from this project later became a part of his ''Theory of the Consumption Function''. Friedman began employment with the National Bureau of Economic Research during autumn 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication ''Incomes from Independent Professional Practice'', which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.

During 1940, Friedman was appointed an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered antisemitism in the Economics department and decided to return to government service. Friedman spent 1941–43 working on wartime tax policy for the Federal Government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation, and during this time he helped to invent the payroll withholding tax system. He later said in an interview, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now." As Friedman grew older he reversed himself; during 2006 he observed, "You know, it's a mystery as to why people think Roosevelt's policies pulled us out of the Depression. The problem was that you had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices and wages up?"

Academic career

Early years

During 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of the war years working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments. Then during 1945, Friedman submitted ''Incomes from Independent Professional Practice'' (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a Ph.D. during 1946. Friedman spent the 1945–46 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.

University of Chicago

During 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years. There he helped build an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago School of Economics.

At that time, Arthur Burns, who was then the head of the National Bureau of Economic Research, asked Friedman to rejoin the Bureau's staff. He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the business cycle. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, ''A Monetary History of the United States, 1867–1960''.

Friedman spent the 1954–55 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculates that he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for ''Newsweek'' magazine (1966–84) were well read and increasingly influential among political and business people.

Friedman was an economic adviser to Republican presidential candidate Barry Goldwater during 1964.

Nobel memorial prize and retirement

In 1976 Friedman won the Nobel Memorial Prize in Economics "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy." During the banquet speech he made a reference to “the Prize in Economic Sciences in Memory of Alfred Nobel”. In that he was the first recipient to do so, and it wasn’t until 2006 that a recipient of the prize called it by its proper name. During 1977, at age 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy. The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled ''Free to Choose'', was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled ''Free To Choose'', was the bestselling nonfiction book of 1980 and has since been translated into 14 foreign languages.

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. During 1988, he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom. Milton Friedman is known now as one of the most influential economists of the 20th century. Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments.

Scholarly contributions

Economics

Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further but Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, ''A Monetary History of the United States'' (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A striking conclusion of their research was one regarding the role of money supply fluctuations as contributing to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing but largely untested view on their relative importance. Friedman's empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by "dropping money out of a helicopter."

Friedman's arguments were designed to counter popular claims that price inflation at the time was the result of increases in the price of oil, or increases in wages: as he wrote,

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, which he termed the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago."

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work. This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market.

Friedman's essay "The Methodology of Positive Economics" (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School of Economics. There he argued that economics as ''science'' should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction.

Statistics

One of his most famous contributions to statistics is sequential sampling. "Friedman did statistical work at the Division of War Research at Columbia. He and his colleagues came up with a sampling technique, known as sequential sampling, which became, in the words of ''The New Palgrave Dictionary of Economics'', 'the standard analysis of quality control inspection.' The dictionary adds: 'Like many of Friedman’s contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that however is a measure of his genius.'"

Other work

Friedman was an important member of the team during World War II that developed a new proximity fuse for anti-aircraft projectiles, which prevented shells from exploding unless they were near the object they are meant to destroy.

Public policy positions

Friedman believed that if the money supply was to be centrally controlled (as by the Federal Reserve) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate. However, instead of government involvement at all, he was open to a "real," non-government, gold standard where money is produced by the private market: "A real gold standard is thoroughly consistent with [classical] liberal principles and I, for one, am entirely in favor of measures promoting its development." He did however add this caveat, "Let me emphasize that this note is not a plea for a return to a gold standard.... I regard a return to a gold standard as neither desirable nor feasible—with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct." He said the reason that it was not feasible was because "there is essentially no government in the world that is willing to surrender control over its domestic monetary policy," however it could be done if "you could re-establish a world in which government's budget accounted for 10 percent of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin..."

He was critical of the Federal Reserve's influence on the economics profession. In a 1993 letter to University of Texas economics professor and former House Banking Committee investigator Robert Auerbach, Friedman wrote:

I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results.

In his 1955 article "The Role of Government in Education" Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers. Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992. In 1996 Friedman, together with his wife, founded the The Foundation for Educational Choice to advocate school choice and vouchers. Friedman also supported libertarian policies such as legalization of drugs and prostitution. Milton Friedman was a major proponent of a volunteer military, stating that the draft was "inconsistent with a free society." In ''Capitalism and Freedom'', he argued that conscription is inequitable and arbitrary, preventing young men to shape their lives as they see fit. During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the conscription in the United States was his proudest accomplishment. Friedman did, however, believe a nation could compel military ''training'' as a reserve in case of war time.

He served as a member of President Reagan's Economic Policy Advisory Board during 1981. During 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said that he was a libertarian philosophically, but a member of the U.S. Republican Party for the sake of "expediency" ("I am a libertarian with a small 'l' and a Republican with a capital 'R.' And I am a Republican with a capital 'R' on grounds of expediency, not on principle.") But, he said, "I think the term classical liberal is also equally applicable. I don't really care very much what I'm called. I'm much more interested in having people thinking about the ideas, rather than the person."

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited. For, example, in response to the United States Post Office's legal monopoly of mail, he said

Friedman made newspaper headlines by proposing a negative income tax to replace the existing welfare system, and then opposing a bill to implement it because the bill merely proposed to supplement the existing system rather than replace it.

During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, ''Economic Freedom in the World''. This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.

Along with sixteen other distinguished economists he opposed the Copyright Term Extension Act and filed an amicus brief in ''Eldred v. Ashcroft''. He supported the inclusion of the word "no-brainer" in the brief.

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms in order to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.

Honors, recognition, and influence

Friedman allowed the Cato Institute to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer during 2002, Peruvian economist Hernando de Soto during 2004, Mart Laar, former Estonian Prime Minister during 2006 and a young Venezuelan student Yon Goicoechea during 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee. Friedman was also a recipient of the Nobel Memorial Prize in Economic Sciences.

Hong Kong

Friedman once said, "If you want to see capitalism in action, go to Hong Kong." He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.

One month before his death, he wrote the article "Hong Kong Wrong – What would Cowperthwaite say?" in the ''Wall Street Journal'', criticizing Donald Tsang, Chief Executive of Hong Kong, for abandoning "positive noninterventionism." Tsang later said he was merely changing the slogan to "big market, small government," where small government is defined as less than 20% of GDP. In a debate between Tsang and Alan Leong, rivals for the job of Chief Executive, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.

Chile

During 1975, two years after the military coup that ended the government of Salvador Allende, the economy of Chile experienced a crisis. Friedman accepted the invitation of a private foundation to visit Chile and speak on principles of economic freedom. He spent seven days in Chile giving a series of lectures. One of the lectures was entitled "The Fragility of Freedom," and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government." Friedman encapsulated his philosophy in a lecture at Universidad Católica de Chile, saying: "free markets would undermine political centralization and political control."

Friedman also met with military dictator President Augusto Pinochet during his visit. He never served as an adviser to the Chilean government, but did write a letter to Pinochet outlining what Friedman considered the two key economic problems of Chile. The letter listed a series of monetary and fiscal measures deemed a "shock program" to end hyperinflation and promote a market economy. His letter suggested (among other, more specific prescriptions) that a brief period of cutting government spending would reduce its fiscal deficit and thus reduce the rate of increase of the quantity of money in the country that was driving inflation. The economist did however admit his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive" and that the measures he outlined were "to be taken as illustrative." Friedman felt that there might be a brief period ("measured in months") of higher unemployment, followed by recovery once inflation was tamed. His letter also suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes to do so. Later, Friedman said he believed that market reforms would undermine Pinochet. Chilean graduates of the Chicago School of Economics and its new local chapters had been appointed to important positions in the new government soon after the coup, which allowed them to advise Pinochet on economic policies in accord with the School's economic doctrine.

According to his critics, Friedman did not criticize Pinochet's dictatorship at the time, nor the assassinations, illegal imprisonments, torture, or other atrocities that were well known by then. In his 1980 documentary ''Free to Choose'', he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ... The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system." In 1984 Friedman proclaimed he has "never refrained from criticizing the political system in Chile."

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet's rule and to the eventual transition to a democratic government during 1990. That idea is included in ''Capitalism and Freedom'', in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states. During the 2000 PBS documentary ''The Commanding Heights'', Friedman continued to argue that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused the military government. Friedman suggested that the economic liberalization he advocated caused the end of military rule and a free Chile.

Iceland

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the ''status quo''." He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland. When they complained that a fee was charged for attending his lecture at the University and that hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: Lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.

Estonia

Although Friedman never visited Estonia, his book ''Free to Choose'' exercised a great influence on that nation's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the "Baltic Tiger." A prime element of Laar's program was introduction of the flat tax. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.

United Kingdom

Milton Friedman influenced the thinking of Alan Walters and Patrick Minford, two of Margaret Thatcher's main macroeconomic advisers. See the book ''Margaret Thatcher's Revolution: How it Happened and What it Meant'', edited by Subroto Roy & John Clarke, Continuum 2005

Criticism

Keynesian criticism

During the financial crisis of 2007–2010, several Keynesian economists such as James Galbraith and Joseph Stiglitz blamed the free market philosophy of Friedman and the Chicago school for the economic turmoil. In response to these criticisms, University of Chicago Magazine noted that Chicago's Rajan, Thaler, and Vishney warned the US government that regulations are needed and, “The Chicago School never said we wanted blind deregulation ... We should really ask who were the people in 2000 who decided markets don’t need regulating. Those were not Chicago economists. Some of them were Clinton officials, and some of them are now advising Obama” and noted other examples to claim that their economists are often mischaracterized regarding their views on deregulation.

After Friedman's death, Keynesian Nobel laureate Paul Krugman, while regarding Friedman as a "great economist and a great man," criticized him during 2007 by writing that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose." National Bureau of Economic Research economist and Friedman's long-time colleague and co-author Anna Schwartz, and Edward Nelson of the Centre for Economic Policy Research responded that Krugman "doubletalks throughout his essay," and asked "How can he say Friedman was a great economist and a great man, if he believes Friedman to have been intellectually dishonest?"

Austrian school criticism

During 1971, libertarian economist Murray Rothbard criticized Friedman's efforts to make the government more efficient as detrimental to individual liberty. He concluded that "And so, as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all." Friedman's position on governmental control of money changed since 1971 when this criticism was made. In a 1995 interview in ''Reason'' magazine he said the "difference between me and people like Murray Rothbard is that, though I want to know what my ideal is, I think I also have to be willing to discuss changes that are less than ideal so long as they point me in that direction." He said he actually would "like to abolish the Fed," and points out that when he has written about the Fed it is simply his recommendations of how it should be run given that it exists.

Other criticism

In her book ''The Shock Doctrine: The Rise of Disaster Capitalism'', journalist and author Naomi Klein critiqued Friedman's ideology and the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia, drawing analogies between the way that Friedman proposed using the social "shock" of the coups to create an economic "blank slate" with Ewen Cameron's controversial medical experiments that used electroshock therapy to create a mental "blank slate" in patients with mental disorders. Based on the extent to which the application of neoliberal policies has contributed to income disparities and inequality, both Klein and Noam Chomsky have suggested that the primary role of neoliberalism was as an ideological cover for capital accumulation by multinational corporations. Chilean economist Orlando Letelier asserted that Pinochet's dictatorship resorted to repression because of popular opposition to Chicago School policies in Chile.

Klein's critique of Friedman is disputed by economists, including Tyler Cowen and Don Boudreaux. Johan Norberg, a senior fellow at the libertarian think tank Cato Institute, accused Klein of distorting quotations from Friedman's writings and of "link[ing] him to Augusto Pinochet's brutal military dictatorship in Chile in the 1970s."

Personal life

According to a 2007 article in ''Commentary'' magazine, his "parents were moderately observant [Jews], but Friedman, after an intense burst of childhood piety, rejected religion altogether." He described himself as an agnostic.

Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife Rose, titled ''Two Lucky People''. He died of heart failure at the age of 94 years in San Francisco on November 16, 2006. He was survived by his wife (who died on August 18, 2009) and their two children, David, who is a philosopher and anarcho-capitalist economist, and Janet. David's son, Patri Friedman, is the executive director of the Seasteading Institute.

See also

Works of Milton Friedman

Friedman–Savage utility function

Friedman rule

Friedman's k-percent rule

Friedman test

List of economists

List of Jewish Nobel laureates

List of notable Presidential Medal of Freedom recipients

History of economic thought

Notes

Bibliography

References

Wood, John Cunningham, and Ronald N. Wood, ed. (1990) ''Milton Friedman: Critical Assessments'', v. 3. Scroll to chapter-preview links. Routledge.

Further reading

Friedman, Milton (1948). "A Monetary and Fiscal Framework for Economic Stability," '' American Economic Review'', 38(3), pp. 245-264. Also in Friedman (1953), pp. 133–56.

Friedman, Milton (1953). ''Essays in Positive Economics'', University of Chicago Press. Chapter- preview links.

Friedman, Milton (1959). ''A Program for Monetary Stability''. Fordham University Press. New York. TOC chapter-preview links.

External links

The Milton Friedman papers at the Hoover Institution Archives

Selected Bibliography for Milton Friedman at the University of Chicago Library

Inflation and Unemployment 1976 lecture at NobelPrize.org

Profile and Papers at Research Papers in Economics/RePEc

Milton Friedman, ''Commanding Heights'', PBS, October 1, 2000, interview, profile and video

Becker Friedman Institute at the University of Chicago

Milton Friedman at the Cato Institute

Free to Choose Network

The Foundation for Educational Choice

Milton Fridman at Scarlett

Milton Friedman:Why Not a Volunteer Army?, ''New Individualist Review'', Spring 1967

The Social Responsibility of Business is to Increase its Profits, Milton Friedman, ''The New York Times Magazine'', September 13, 1970

Interview with Milton Friedman, Dominic Streatfeild, May 25, 2000, source material for ''Cocaine: An Unauthorised Biography''

Milton Friedman vs. The Fed Bailout by Michael Hirsh, ''Newsweek'', July 17, 2009

Four Deformations of the Apocalypse, David Stockman, ''The New York Times'', July 31, 2010

The Case for Free Trade by Milton and Rose Friedman

How to Cure Inflation : Milton Friedman

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Coordinates	56°09′″N40°25′″N
name	Aesthetic Perfection
background	solo_singer
origin	Los Angeles, California
genre	Electro-IndustrialAggrotech
years active	2000 – present
label	Out of Line Records (Europe)Bractune Records (USA)
website	aesthetic-perfection.netOfficial MySpace
current members	Daniel Graves Tom Napack (live keyboards/keytar) Tim Van Horn (live drums)
past members	David Dutton (Live support Keyboards)
notable instruments	}}

Aesthetic Perfection is an American electronic-industrial musical project created by Daniel Graves in 2000. The style is reminiscent of many aggrotech, industrial, dance music bands, while also leaning towards other styles such as alternative music. Aesthetic Perfection is signed directly to Bractune Records in the USA and is distributed through Out of Line Records in Europe and more recently, Gravitator Records in the Russian federation and Death Watch Asia in Japan.

Aesthetics Perfection's third and newest album released, All Beauty Destroyed, is due for release on 4th November 2011 in Europe and 8th November 2011 in America under the label Metropolis Records.

Discography

Releases {| | align="center" style="background:#f0f0f0;"|Title | align="center" style="background:#f0f0f0;"|Details | align="center" style="background:#f0f0f0;"|Label | align="center" style="background:#f0f0f0;"|Year |- | ''Close to Human''|| CD, Album || Out of Line Records/ Bractune Records || 2005 |- | ''A Violent Emotion''|| CD, Album, Digi || Out of Line Records/ Bractune Records || 2008 |- | ''A Violent Emotion''|| CD, Album || Gravitator Records|| 2009 |- | ''All Beauty Destroyed''|| CD, Album || Gravitator Records/ Metropolis Records|| 2011 |}

Remixes of Other Artists {| | align="center" style="background:#f0f0f0;"|Title | align="center" style="background:#f0f0f0;"|Details | align="center" style="background:#f0f0f0;"|Track Title | align="center" style="background:#f0f0f0;"|Artist | align="center" style="background:#f0f0f0;"|Released By | align="center" style="background:#f0f0f0;"|Year |- | ''999'' || 2xCD, Limited || "Sacrifice" (Aesthetic Perfection Remix) || Agonoize || Out of Line || 2005 |- | ''Endzeit Bunkertracks Vol. 2'' || 4xCD, Box, Limited || "Sick Fuck" (Aesthetic Perfection Remix || Unter Null || Alfa Matrix || 2006 |- | ''Compendium'' || CD, Album, Limited || "Still Alive" (Aesthetic Perfection Remix) || Solitary Experiments ||Out of Line || 2007 |- | ''The Crypt Injection'' || CD, Album, Enhanced || "Portrait of Homicide" (Aesthetic Perfection Remix) || Dawn of Ashes || COP International || 2007 |- | ''A Kiss to Resist EP'' || CD || "Our Game" (Aesthetic Perfection Remix) || Suicidal Romance || Infacted Recordings || 2007 |- | ''Heat EP: All Pain is Beat''|| CD, Vinyl || "Can't Change the Beat" (Aesthetic Perfection Remix) || Combichrist || Metropolis Records || 2009 |- | ''Rot''|| 2 x CD Ltd || "Rot" (Remix by Aesthetic Perfection) || [:SITD:] || Accession Records || 2009 |- | ''Dogmatic Infidel Comedown Ok''|| CD || "Kingdom of Welcome Addiction" (Remix by Aesthetic Perfection) || IAMX || 61 Seconds || 2010 |- | ''Dog Eat Dog''|| CD, Maxi Single || "Dog Eat Dog" (Remix by Aesthetic Perfection) || Hocico || Out of Line || 2010 |- | ''Electronic Saviors''|| 4 x CD Ltd || "Version 2" (Aesthetic Perfection Mix) || genCAB || Metropolis Records || 2010 |} Compilations {| | align="center" style="background:#f0f0f0;"|Title | align="center" style="background:#f0f0f0;"|Details | align="center" style="background:#f0f0f0;"|Track Title | align="center" style="background:#f0f0f0;"|Label | align="center" style="background:#f0f0f0;"|Year |- | ''Septic III'' || CD || "Sacrifice" || Dependent || 2002 |- | ''Machineries of Joy Vol. 3'' || 2xCD, Limited || "I Belong to You" || Out Of Line || 2004 |- | '':Per:Version: Vol. 16'' || CD, Enhanced || "Architect" || Ritual || 2005 |- | ''Awake the Machines Vol. 5'' || 2xCD, Limited || "Surface" (Pneumatic Detach Remix) || Out of Line || 2005 |- | ''New Signs and Sounds 03/05'' || CD, Enhanced || "Coward" || Zillo || 2005 |- | ''Machineries of Joy Vol. 4'' || 2xCD, Limited || "Living the Wasted Life" (Machineries Mix) || Out of Line || 2007 |- | ''Extreme Sündenfall 6'' || 2xCD || "Living the Wasted Life" (Deadbeat Remix) || Indigo || 2007 |- | ''Awake the Machines Vol. 6'' || 2xCD, Limited || "Pale" (Beta Edit) || Out of Line || 2008 |- | ''Das Bunker 4: Brighter Than A Thousand Suns'' || 2xCD || "Schadenfreude" (Beta Edit) || Das Bunker || 2008 |- | ''Electrostorm'' || Limited || "The Ones" || Out Of Line || 2009 |- | ''Electronic Saviors''|| 4 x CD Ltd || "The Ones" (genCAB Remix) || Metropolis Records || 2010 |}

References

Category:Musical groups established in 2000 Category:Electro-industrial

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