Did the New Deal make the Great Depression last longer?

[rose-colored-coolaid]

[sniglet]

[WestSideBilly]

I've mostly taken the view that the New Deal mitigated the damage and WW2 ended the Great Depression. But since we have only a sample of one such event, it's not really possible to say for certain how different actions would have affected the 1930s.

Where I disagree with views such as sniglet's is that private industry is always better at utilizing capital than governments. Private industry and capitalists are always short sighted; their goal is to maximize ROI. But not everything good has a positive ROI. Roads may have led to urban sprawl, but they also greatly increase the efficiency of moving goods and people. A capitalist would never create a park, or build a levee or dam. Capitalists spent the last 5 years throwing money at houses we didn't have buyers for, and prior to that internet startups we didn't have a use for. Hardly an efficient use of capital.

[Charles Dean]

[jon]

.[quote][/quote] A capitalist would never create a park, or build a levee or dam.

There are many private parks and dams. The parks are obvious, those are the places where you pay admission. Private dams are harder to observe, but they show up in statistics all the time. Google even returns plenty of hits on private levees. Private roads are always an option, and interstate railroads have been private except when railroad buffs are able to get government funding for ridiculously poor passenger service.

The many internet startups that failed are just the messy way that capitalism works to find the best from among a large number of alternatives. The guys that worked on those would not have been as motivated to work so hard and try new things if they had no potential reward. And anyone who has worked on government contracts will tell you that a huge number of those are canceled after blowing through $100s of millions or more also.

There were a large number of networks that were being developing at the same time as everyone's favorite example of government prescience, the internet. But there are network effects that lead to a natural monopoly. That force for a common networking platform is even stronger than what Microsoft showed for operating systems. With the government as a major player, they simply won the race. But the government-built internet was designed to work with trusted peers, which is why there are still huge gaps in security being exposed even now in the base protocols.

I'm not claiming that there isn't a role for government, obviously there is. But you have to look at the facts as they really are.

[rose-colored-coolaid]

[Charles Dean]

Another good example of this, which is comparing and contrasting the capitalist system vs. gov't controlled is with cellular phone technology.

We have not the worst, but definitely not the best cell phone network out there. Many other countries just decided that they were going to have one kind of cellular technology and stuck to it. Because of that, phone companies were able to focus on better service and better products rather than focus on creating competing networks. It's caused better rates and better selection in other countries.

In other countries, say like Japan, you go buy your phone, then you pick out who you want to do your cell service, rather than being stuck with one network and phone type.

[jon]

[rose-colored-coolaid]

[sniglet]

[FreedomLover]

The New Deal might not have brought the kind of Reagen "paper prosperity", but it made people feel better about themselves and gave them some bread and soup to eat. At the end of the day that's all that matters, if pride and full belly.

[WestSideBilly]

[sniglet]

[WestSideBilly]

[rose-colored-coolaid]

I think if you're going to argue the value of the New Deal intelligently, you must contrast post-war costs (a large deficit had to be repaid) with depression era gains (people had jobs). Saying that the New Deal made the depression itself worse lacks credibility because it ignores the fact that private business was simply unwilling to spend regardless of how cheap the labor was.