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The great depression was not a sign of the failure of monetary policy or a result of the failure of the market system as was widely interpreted. it was instead a consequence of a very serious government failure, in particular a failure in the monetary authorities to do what they'd initially been set up to do.
-Milton Friedman
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The Great Depression Was Not A Sign

Milton Friedman
The great depression was not a sign of the failure of monetary policy or a result of the failure of the market system as was widely interpreted. it was instead a consequence of a very serious government failure, in particular a failure in the monetary authorities to do what they'd initially been set up to do.
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Government Serious Great Depression

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You have a class of young strong men and women, and they want to give their lives to something. advertising has these people chasing cars and clothes they don't need. generations have been working in jobs they hate, just so they can buy what they don't really need. we don't have a great war in our generation, or a great depression, but we do, we have a great war of the spirit. we have a great revolution against the culture. the great depression is our lives. we have a spiritual depression.
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The stock market crashed in october 1929. but that was not the cause of what caused the great depression. it was, in my opinion, a very minor element of it. what happened was that from 1929 to 1933 you had a major contraction which, in my opinion, was caused primarily by the failure of the federal reserve system, to follow the course of action for which it was set up. it was set up to prevent exactly what happened from 1929 to 1933. but instead of preventing it, they facilitated it.
Elements October Causes
In the large sense the primary cause of the great depression was the war of 1914-1918. without the war there would have been no depression of such dimensions. there might have been a normal cyclical recession; but, with the usual timing, even that readjustment probably would not have taken place at that particular period, nor would it have been a "great depression.
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A sign, or representamen, is something which stands to somebody for something in some respect or capacity. it addresses somebody,that is, creates in the mind of that person an equivalent sign, or perhaps a more developed sign. that sign which it creates i call the interpretant of the first sign. the sign stands for something, its object. it stands for that object, not in all respects, but in reference to a sort of idea, which i have sometimes called the ground of the representamen.
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A private enterprise system needs some measuring rod, it needs something, it needs money to make its transactions. you can't run a big complicated system through barter, through converting one commodity into another. you need a monetary system to operate. and the instability in that monetary system is devastating to the performance of the economy.
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The fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933 ... far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.
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