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False Dawn

The New Deal and the Promise of Recovery, 1933–1947

George Selgin

False Dawn

The New Deal and the Promise of Recovery, 1933–1947

George Selgin

A definitive history of the United States’ recovery from the Great Depression—and the New Deal's true part in it.

FDR’s New Deal has long enjoyed a special place in American history and policy—both because it redefined the government’s fundamental responsibilities and because Roosevelt’s “bold experimentation” represented a type of policymaking many would like to see repeated.

But “the thing about bold experiments,” economist George Selgin reminds us, “is that they often fail.” In False Dawn Selgin draws on both contemporary sources and numerous studies by economic historians to show that, although steps taken during the Roosevelt administration’s first days raised hopes of a speedy recovery from the Great Depression, instead of fulfilling those hopes, subsequent New Deal policies proved so counterproductive that over seventeen percent of American workers—more than the peak unemployment rate during the COVID-19 crisis—were still either unemployed or on work relief six years later.

By distinguishing the New Deal’s successes from its failures, and explaining how the U.S. finally managed to lay the specter of mass unemployment to rest, Selgin draws salient lessons for dealing with future recessions.

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Markets and Governments in Economic History

Economics and Business: Economics--History

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Reviews

“False Dawn is perhaps one of the best books ever written about the Great Depression. It is thoroughly informed by academic literature, comprehensive in its coverage, balanced in its treatment, and a lively and engaging read. A great achievement.”

Charles Calomiris | Columbia Business School

"Norman Thomas, six times presidential candidate of the American Socialist Party, and for decades the second most popular speaker in America behind whoever was president, used to complain that the Democrats and FDR had stolen the Socialist Party Platform of 1928. Thomas was right. Read Selgin’s new book and learn why that was a false dawn for the US economy."

Vernon Smith | Chapman University, winner of the Nobel Prize for Economics

“False Dawn is an extraordinary achievement. Economists, historians, and others have been researching the New Deal's recovery programs and policies since the 1930s, but no one has ever done so as comprehensively and astutely as Selgin. False Dawn will be required reading for all who seek to understand how the New Deal affected the course of the Great Depression.”

Robert Higgs | author of "Depression, War, and Cold War"

“The New Deal is the proverbial elephant grasped by blind men. No one is quite sure what it is. The NRA, the AAA, the RFC? Something else, something more? And did it all add up to recovery or malaise? Selgin has done a great service in writing this comprehensive, engaging, and fair-minded appraisal—one that is destined to become a standard reference.”

Benn Steil | Council on Foreign Relations

Table of Contents

List of Illustrations
Preface

Part I: Groundwork
1. The Record
2. Inventing the New Deal
3. The Banking Crisis
4. The Bank Holiday
5. Deposit Insurance
6. The RFC, Part 1
7. FDR and Gold

Part II: The New Deal
8. The AAA
9. The NRA
10. The NRA, Coda: The Brookings Report
11. A New Deal for Housing
12. The RFC, Part 2
13. Fiscal Stimulus?
14. FDR’s Fed
15. The Recovery So Far
16. The Roosevelt Recession
17. The Keynesian Myth
18. The Keynesian Myth, Continued
19. Fear Itself
20. Fear Itself, Continued

Part III: After the New Deal
21. War, and Peace
22. The Phantom Depression
23. The Fate of Rosie the Riveter
24. Happy Days
25. Postwar Monetary Policy
26. The Great Rapprochement
Notes
References
Index