Many libertarian economists argue in favor of laissez-faire economic policies. As a supporting argument, they often claim that Roosevelt's New Deal program actually prolonged the Great Depression. I'm a little skeptical about this claim. I somehow think that libertarians tend to state their opinions as the absolute and obvious truth...

So, is there a general consensus among economists regarding whether the New Deal helped to end the Great Depression? What are some of the evidence backing the libertarian side of the argument?

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    If there is one thing I know about economists, it is that you will definitely not find a consensus....
    – mikera
    Commented Oct 17, 2013 at 4:53
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    Welcome! However, this question appears to be off-topic because it is not about examining a notable claim. This would be a much better fit (and you'd get better answers) at history.stackexchange.com or politics.stackexchange.com.
    – user5582
    Commented Oct 17, 2013 at 4:57
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    @Articuno - this is a "notable claim" in the field of economics - I've certainly encountered it several times before, and it can be usefully examined. I don't think there will be anything like a consensus - but that doesn't make it unworthy of study, surely? Question could probably be rephrased however: "Did Roosevelt's New Deal prolong the Great Depression?"
    – mikera
    Commented Oct 17, 2013 at 5:11
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    I guess the main problem is that no evidence of notability has been presented. Please read FAQ: Must all questions be notable to see what I mean. StephenChen should quote the claim that he wants us to examine and link to where he quoted from.
    – user5582
    Commented Oct 17, 2013 at 5:30
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    No, there is no consensus. Different schools that teach economics tend to lean towards different schools of thought. Schools like GMU or Chicago tend to lean towards more free-market type thinking. There are plenty of economists that sharply disagree with the common narrative of the Great Depression, FDR, and the New Deal. econfaculty.gmu.edu/wew/articles/09/… Economics itself is apolitical. The fact that an economist who supports mostly free markets is also libertarian oriented is irrelevant. It is not an issue of "libertarian economists" vs. others. Commented Oct 17, 2013 at 20:30

1 Answer 1


The is no evidence that the New Deal extended the Great Depression.

On the other hand, there are those who assert that the New Deal ended the Great Depression which is not true either. The Great Depression as we all know ended due to the increased demand of production of World War II.

There are those who think that the system needs to "clean itself" in order to rejuvenate and come back to full capacity. However, the system did let a lot of banks and companies go broke, so even if the argument was true, it does not apply, as the system let itself be "cleansed". There clearly was a lower equilibrium in production as were stuck without making investments for fear of lack of demand in a cycle that just reaffirmed itself. The deflation necessary to make everything cheap enough to increase demand could have taken a large number or years to achieve so it is by no means automatic that that adjustment would have taken less time without the New Deal.


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