How the 'Depression, War and Cold War' Impact America Today

"Come you masters of war, you that build to destroy."

— Bob Dylan, Masters of War, 1963

"Depression, War, and Cold War: Studies in Political Economy," is not a “how to” book, rather it is a “how” book. It is one of those rare offerings that explicates the truth of things related to the inimical conflation of government, the military, and our congressional banditti these past seventy years or so. It will fascinate the student of history and assuage those econ majors with their plastic pocket protectors who delight in plumbing the depths of graphs and charts seeking the truth of economic upturns and gross domestic product downturns. It is a book that reveals a singular and important element of the derailment of our culture: where human nature has triumphed in an egophanic revolt against the old order.

Dr. Robert Higgs’ concern is with properly analyzing and correctly interpreting the historical event juxtaposed against the economic data. One example of Higgs’s interpretation is his development of a chronology to better understand that period of history in question, to wit: “Great Depression, 1930-40; transition to the war economy, 1940-1; war-command economy, 1942-5; demobilization, re-conversion, and decontrol (the true Great Escape), 1945-6; and postwar prosperity, 1946 and beyond.”

His findings, then, stand opposed to the received wisdom. For example he argues that President Franklin Roosevelt’s New Deal policies prolonged the Great Depression by creating an oppressive climate that “threatened” Big Business through hostile laws, court decisions, regulations, and the obvious antipathy of the nomenclatura toward the “investor class,” resulting in a climate of uncertainty toward the “future of property rights.”

Higgs also argues, quite convincingly, that the Second World War did not bring back true prosperity, but rather had the dubious effect of creating a new entitlement class in those large business that engaged in supplying the military with war material. He explicates in detail in his essay, "Private Profits, Public Risk," the interesting history of the relationship between the New Dealers and those businesses being urged to convert to wartime status in 1940. Here the New Dealers, in their haste to produce war material, unnecessarily ceded to many guarantees to Big Business who were, ironically, concerned with being seized by Big Brother. The business and financial risks of this incestuous relationship between Big Business and Big Government was, of course, placed on the calloused back of the American taxpayer. “The irony is that the taxpayers,” Higgs’ writes, “have been paying the price ever since, and every indication suggests that they will go on paying it indefinitely.”

Perhaps the most telling contribution is his essay, "The Cold War Economy, Opportunity Cost, Ideology, and the Politics of Crisis." Here Higgs tells his readers that, as a result, of the Cold War and “the dominant ideology of global anti-communism,” the institution of various foreign policy doctrines related to the “Cold War,” and corresponding military commitments the “high base level of defense spending” increased to a startling 7.5% of the GNP.

Congressional pork barrel spending is closely examined in his erudite essay, "Hard Coals Make Bad Law: Congressional Parochialism versus National Defense." Here the reader will be hard pressed to identify any member of the Congress concerned with the summum bonum. The author’s descriptions of the Pennsylvania anthracite coal scheme, Pennsylvania Congressmen Dan Flood and Joe McDade, and the sundry machinations in the halls of Congress suggest that a clean, well lighted bordello provides a much more provident and moral service to the taxpayers.

In a draft of his famous 1961 farewell speech, President Dwight David Eisenhower, warned of the “military-industrial-congressional complex,” later deleting “congressional” from the list. Higgs has determined to introduce the complete phrase, quite appropriately, into the American lexicon by illustrating and documenting a number of the gross failures of our government and business community. Higgs has destroyed the Rooseveltian myth and, more importantly, itemized elements of the philosophical derailment inherent within the managerial elite of the American Socialist State.

The United States today, is very much like the Catholic Church during the Middle Ages. Attacked by rising Islam from the outside and the Manichean heresy internally, the Catholic Church managed to defeat both. America’s future remains to be seen.