I guess I need to read the book, but maybe first Tyler Cowen could explain to me how Alexander Field’s reinterpretation of the Depression and the War constitutes a change from the liberal conventional wisdom.
The conventional wisdom, as I understand and embrace it, is that the Great Depression was a gigantic, pointless, wasteful tragedy is which horribly misguided economic policy led to massive idleness and huge shortfalls between actual and potential output. Then came World War II which was even more terrible in its own way, but at least led governments to try to maximize output. Then the war ended, so production could be re-oriented toward making consumer goods but governments had also learned that keeping output near potential is possible and important. The result was massive prosperity. Field writes:
This book is built around a novel claim: potential output grew dramatically across the Depression years (1929-1941), and this advance provided the foundation for the economic and military success of the United States during the Second World War, as well as for what Walt Rostow (1960) called “the age of high mass consumption” that followed. This view, if accepted, leads to important revisions in our understanding of the sources and trajectory of economic growth to the second quarter of the century and, more broadly, over the longer sweep of U.S. economic history since the Civil War.
The claim seems neither especially novel nor to force revisions of anything. It seems to me not only consistent with, but actually identical to, the standard Keynesian account of these events. The Depression was caused by bad demand management and whatever bad supply side policies the Hoover or Roosevelt administration may have engaged in did nothing to change the fact that potential output was growing and poor macro outcomes were driven by demand-side issues.