Mailvox: context is king

Druidhouse perceives a nonexistent contradiction:

in the interview you say that WWII didn’t get us out of the depression, but rather that the fact that the u.s. was the only manufacturing facility left standing and that europe and the rest of the world were in rubble, thereby giving us a monopoly for a while on manufactured goods. but it was precisely WWII that left Europe’s infrastructure in ruins and america’s unscathed which gave us that monopoly. you are expressing a contradiction. and there’s nothing wrong with my reading comprehension.

I am not expressing a contradiction here. While there is nothing wrong with Druidhouse’s reading comprehension, or more to the point, his listening comprehension, his confusion stems from his ignorance of what “WWII got us out of the depression” means in the economic context.

In that context, which of course is the context in which the Alt Investors interview took place, “WWII got the USA out of the Great Depression” is a Keynesian and Neo-Keynesian argument in which it is asserted that the huge increase in government expenditure involved in the production of war material led to the post-war economic growth. It absolutely does NOT mean that “winning the war and surviving with the only intact industrial infrastructure” led to economic growth.

This should be obvious, since the economists who make the “WWII solution to depression” argument are not advocating World War III and the destruction of the European and Chinese industrial infrastructures, but rather increased government expenditure. It is a particularly stupid argument, of course, since Germany, Japan, Great Britain, and the Soviet Union also vastly increased their defense spending without realizing any post-war economic growth as a result… and it was not even necessary for the USA to enter the war to ensure the destruction of the German, Russian, French, Italian, and British infrastructures.