Summary

"The Forgotten Man: A New History of the Great Depression" by Amity Shlaes challenges the conventional narrative of the 1920s and 1930s, arguing that the New Deal, while well-intentioned, ultimately hindered economic recovery. Shlaes contends that the 1920s were a period of genuine economic growth obscured by the subsequent Depression, and that the crash of 1929, while significant, did not cause the Depression itself.

The book critiques the interventions of both Herbert Hoover and Franklin D. Roosevelt, asserting that their policies, despite differing in approach, shared a common flaw: a lack of faith in the marketplace. Hoover's attempts to manage wages and tariffs, and Roosevelt's expansive regulatory agencies and welfare programs, are portrayed as impediments to natural economic correction. Shlaes emphasizes the role of deflation, rather than inflation, as a key problem during the Depression, and argues that government planning and control stifled private sector initiative and prolonged the crisis.

Through detailed accounts of key figures like Andrew Mellon, Samuel Insull, and Wendell Willkie, Shlaes explores the human impact of the Depression and the New Deal. She highlights the stories of individuals who were negatively affected by government policies, labeling them the "forgotten men"—those who bore the costs of the New Deal's programs without receiving its benefits. The book examines the influence of European collectivist models, particularly from Soviet Russia and Mussolini's Italy, on New Deal policies, suggesting that these influences led to misguided economic strategies.

Shlaes analyzes the political dimensions of the New Deal, arguing that Roosevelt's creation of interest-group politics, while successful in securing his reelection, fundamentally altered the relationship between citizens and government. She revisits the economic theories of John Maynard Keynes and their application in the New Deal, questioning the emphasis on consumer spending at the expense of producers. Ultimately, "The Forgotten Man" offers a provocative reinterpretation of the Great Depression, challenging readers to reconsider the role of government intervention in economic crises.