World War II Did NOT End the Great Depression

Despite the fondest wishes of Franklin D. Roosevelt's cheerleading "historians", FDR made America's economic situation substantially worse. Not even World War II could bring a halt to the Great Depression. Ironically, FDR's policies prolonged the Depression, and it was actually his death near the end of the War that helped the Depression to end.

The energetic productivity of World War II ended the Great Depression? Well, then, in these current times of economic uncertainty, why don't you tear your house down and rebuild it? That will ensure that you're extremely productive for a while.

During WWII, historians and even some economists told us how much better of we were because we were in a war. Unemployment was way down, they cheered, even though a lot of the newly employed were coming home in body bags.

We built lots of bombs, tanks, and airplanes during the War, but building weapons of destruction does not make a country productive. Real productivity at the time sharply declined; things of real value became in shorter and shorter supply during the War, while private investment and personal consumption could not help but continue to fall.

Up to and during the war, FDR practiced heavily predatory practices against the most productive sectors of society. It was common knowledge among leaders of industry that Roosevelt's practices put a significant damper on their ability to fuel an economic expansion. Lammot Du Pont complained that "Uncertainty rules [every] situation...It is impossible to even guess at the answers."

A 1939 poll by the American Institute of Public Opinion found that nearly two thirds of respondents thought that "the attitude of the Roosevelt administration toward business is delaying business recovery." In May 1945, the AIPO asked "Do you think [Harry] Truman will be more favorable...toward business than Roosevelt was?" Eight times as many people said yes than said no.

A League of Nations study in the late 1930's indicates that FDR's New Deal created massive economic uncertainty that led to economic malaise. The destructive energies of World War II did very little to bring America out of the doldrums. It was only after FDR died and Harry Truman took over as President that government once again became predictable enough for Americans to feel comfortable enough to begin producing things again.


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  2. Thanks for providing some perspective on this issue. I had heard my whole life that WWII ended the depression. Even many economists buy this line of thinking. But, as you note, we were in a command economy, so evaluating things like the employment rate and productivity against a more normal economy is like comparing apples to oranges.

    As Robert Higgs has very aptly demonstrated in his empirical book Depression, War, and Cold War, we actually experienced yet another depressive dip after the war that didn't really recede until well into the 1950s when some of the most onerous features of FDR's policies were rolled back. Thus, the Great Depression effectively lasted an entire generation.

    After being out of power for over two decades, the Republicans finally gained significant seats in Congress with a campaign that simply asked, "Had enough yet?" They didn't even have to qualify the question. Everyone knew that it meant socialist policies.

    The way American politics works, however, is that when we're tired of one set of thuggish politicians, the alternative is simply another set of thuggish politicians that turn out to be only a variation on a main theme.


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