The Great Depression (1930–38) came on the heels of a U.S. stock market crash in 1929 and brought with it widespread bank failures, a 25 percent unemployment rate and widespread poverty. Both the market crash and the Depression were blamed on the alleged excesses of
free-market capitalism. Investors were blamed for reckless speculation. Bankers were accused of fraud. If free markets failed, said economists and politicians at the time, then government intervention would “fix” the failure. A vast expansion of government ensued, including a more
powerful Federal Reserve, the Social Security system and laws favoring labor unions. But the tragedy of the 1930s reflected a failure—not of capitalism—but of statism. In this lecture Mr. Salsman explains how government intervention caused the economic-financial debacle of the 1930s, and how a radical re-assessment of that period is a crucial element in any rehabilitation of capitalism in modern life.