Was Austerity Responsible for the American Revolution?

In The New York Review of Books, Steve Pincus argues that George III’s austerity policies were responsible for the Revolution. He writes,

“Today, we tend to regard the practice of using government spending to stimulate economic growth as an invention of John Maynard Keynes in the 1930s. But already in the eighteenth century, self-styled Patriots, followers of Pitt on both sides of the Atlantic, argued that what the British Empire needed if it was to recover from the fiscal crisis was not austerity but an economic stimulus. In the midst of the crisis one journalist wrote that Pitt and the Patriots believed that the burgeoning debt could be reduced by increasing ‘the national stock,’ or Gross National Product, whereas Prime Minister Grenville believed ‘that an hundred and forty millions of debt is to be paid by saving of pence and farthings.’” To read the entire article go here:

1776: The Revolt Against Austerity by Steve Pincus | NYRblog | The New York Review of Books.

Lewis Walpole Library, Farmington, Connecticut Detail from The Great Financier, or British Economy for the Years 1763, 1764, 1765, showing British Prime Minister George Grenville holding a balance in which debt outweighs savings, 1765

Lewis Walpole Library, Farmington, Connecticut
“Detail from The Great Financier, or British Economy for the Years 1763, 1764, 1765, showing British Prime Minister George Grenville holding a balance in which debt outweighs savings, 1765”

Review of Barry Eichengreen’s “Hall of Mirrors: The Great Depression, the Great Recession, and the Uses – and Misuses – of History” |History News Network

Robert Brent Toplin reviews Barry Eichengreen’s Hall of Mirrors and concludes, “He makes that valuable contribution by addressing the subject uniquely, asking what we have learned and failed to learn from the record of the Great Depression. His investigation offers many useful hints about ways policymakers can avoid repeating the mistakes of the past.” Read the entire review here:

History News Network | Review of Barry Eichengreen’s “Hall of Mirrors: The Great Depression, the Great Recession, and the Uses – and Misuses – of History”.

Hall of Mirrors Great Depression

“Austrian Economics: Made in the USA” | History News Network

Janek Wasserman explains how Austrian economics was reduced to a simplified ideology as it was popularized in the U.S. “While the US trip did wonders for Hayek’s public profile, his long-time Austrian friends and colleagues had misgivings about Hayek Lite. The condensedversion—about which Hayek initially had some reservations but ultimately appreciated—lost most of the book’s nuance, becoming a dogmatic defense of free markets and an ill-defined liberty.” Read the entire article here:

History News Network | Austrian Economics: Made in the USA.

Hayek

History News Network | This Is What Right-to-Work Means

Too few of us know enough about this benign sounding policy: “the right to work.” As with most euphemisms, this phrase obscures more than it illuminates. Therefore, Elizabeth Tandy Shermer’s brief summary of the history of this policy is instructive. She ponders: “That guarantee certainly sounds benign, if not all-American. Who could be against the right to work, especially in a prolonged recession?” Read the entire article here:

History News Network | This Is What Right-to-Work Means.

sunbelt capitalism

Three Lessons from the French Revolution European Policymakers Should Keep in Mind | History News Network

We don’t usually think about learning economic lessons from the French Revolution, but Rebecca L. Spang offers some interesting lessons from this unlikely source. As she explains: “The moment has come to diversify our analogy portfolio.” For her lessons go here:

History News Network | 3 Lessons from the French Revolution European Policymakers Should Keep in Mind.

Stuff and Money French Revolution

History News Network | The Myth of the Rational Actor

Isn’t it time that we get rid of this crazy myth! Susan J. Matt thinks that historians can help undermine this myth. She says: “It is time we recognize that rationality is an elusive quantity, defined and redefined by social habit and market forces, and that rational man is a chimera. His purported behavior has not held steady across the centuries, nor has his personality. Yet economists have clung to this abstraction because he is a convenient factor in their equations. Robert Heilbroner remarked, “Mathematics has given economics rigor, but alas, also mortis.” To breathe new life into their studies, economists should create a new homo economicus—one who acts on more than self- interest and whose emotions change over time. Such a creature may not fit into math equations as easily as the rational actor did, but he will more accurately reflect how and why individuals make the economic choices they do.”

History News Network | The Myth of the Rational Actor.

Homo Economicus

History News Network | Why Aren’t People Up in Arms About Capitalism these Days?

Steve Fraser believes he has found the reason for the non-response to the current Gilded Age: “Can these two diverging political economies – one resting on industry, the other on finance – and these two polarized sensibilities – one fearing God, the other living in an impromptu moment to moment – explain the Great Noise of the first Gilded Age and the Great Silence of the second?” Read the entire article at:

The Age of Acquiescence

History News Network | Europeans Need to Reconsider the Lessons of the Great Depression

Here is another perspective on the lessons from the Great Depression, but in this case the focus is Europe. Barry Eichengreen has some great insights into the current European situation, particularly in his observation that “Across Europe, anti-system parties of Left and Right are gaining political traction. That perverse policies and economic hard times feed political extremism is another important implication of the 1930s. It is still not too late for European policy makers – and historians – to get this lesson right.”

History News Network | Europeans Need to Reconsider the Lessons of the Great Depression.

Hall of Mirrors Great Depression