Was The Great Depression Really That Bad?

The dominant narrative holds that the Great Depression was a uniquely horrible event, consisting of economic collapse and human suffering on a scale far beyond anything in contemporary experience. I suspect this may be substantially exaggerated, and the Depression may have been much less bad than is popularly supposed—say, not much worse than the 2008 depression and its aftermath, relative to what came before. (This is still very bad.)

There is a motive for such an exaggeration. The tale of the New Deal vanquishing the Great Depression and preventing its recurrence is a key piece of the founding mythology of the contemporary American regime. This story justifies not only the welfare state, but also the Federal Reserve and other financial regulations, all of which are vital to the current system. The worse the Great Depression was, the stronger these justifications become; as such, champions of the status quo would benefit from painting the Great Depression as a unique horror, for the same reasons that they benefit from painting the Nazis as a unique horror. (The Nazis, while horrible, were not unique.) Of course, the presence of this motive does not prove deception, but it does make me suspicious.

The stories used as justification for the Great Depression’s unique horror are all explainable by other means. In popular culture, the most common (now slightly anachronous) is grandparents of Boomers and Gen Xers who lived through the Depression and came out extremely frugal, hoarding disposable packaging and old shoes because they felt a need to keep every object of value. While this attitude reflects material poverty by modern standards, I think this is because of increasing industrialization and technologically-driven material abundance, rather than because of a temporary financial collapse. If you go back to, say, the 1870s, then all but the very wealthy would have hoarded and reused metal pins, cloth scraps (note that the link offhandedly dates the practice to the late 1800s, then has a lengthy section on its usage during the Depression decades later), and much else that is considered trash by today’s standards. This trend has continued, and today Millennials are generally less prone to hoard worn furniture, old computers, and other mid-value objects than their parents.

The Depression is also associated with the Dust Bowl collapse and emigration, which was a catastrophe contemporaneous with, but separate from, the Great Depression. When farmland literally blows away in the wind, this is not because of stock markets or employment rates, and is properly classified as a natural disaster rather than an economic event. However, the only contemporary memory of this event comes from The Grapes Of Wrath, in which Steinbeck uses the suffering caused by climate change to justify union power. As a result, the Dust Bowl is bound up with economic policy in the popular imagination.

There are also the stories of shantytowns, the camps where otherwise homeless people would erect crude shelters on parks or vacant land. I know of maybe half a dozen of these in Oakland and Berkeley today, and I don’t exactly have my finger on the pulse of my local community, so I find it hard to take this as a sign of the Depression’s unique horror. (I will also irresponsibly speculate that the presence or absence of shantytowns in cities depends more on police policy than on the economy, so long as the economy hasn’t fully solved the problem of scarcity.)

Of course, explaining away these stories is not a full proof that the Great Depression was less dire than is popularly supposed. Such a proof would require a full investigation of the relevant statistics and primary sources. This would be a huge undertaking, since I’m not willing to take most econometric analysis at face value in cases of this type. Economists can be among the most vocal defenders of the status quo. Many are more interested in pushing an ideological agenda than in reporting truth, as I saw firsthand during my brief career in that field. While I would be somewhat surprised if the data was literally falsified, I think it’s likely that much of the analysis is heavily skewed. In spite of the difficulty, I think such an investigation is warranted, and I hope to get around to it someday. Until then, I remain skeptical of the dominant narrative.

Why Robert Baratheon Was An Excellent King

George R. R. Martin is a skilled sociologist. His Game of Thrones books contain a well-constructed world with realistic power dynamics. While fictional evidence should never be mistaken for real evidence, fiction can nevertheless be a good way to learn complicated topics from skilled authors, and Martin’s work holds many important lessons. One of these is the reign of Robert Baratheon.

In the books, Robert has a reputation as an embarrassment, and the nobility regard him as failing to live up to the grandeur and dignity of the throne. Robert himself shares this view, and laments that he is out of his depth as an administrator.

However, his reign is a time of unrivaled peace and prosperity. The noble houses keep their uneasy truce. Travel and commerce are safe. The people are untroubled by internal strife or outside threats. The only interruption is Balon Greyjoy’s rebellion, which Robert swiftly crushes at the head of a unified realm. There may be little for historians to write about, but from the perspective of the great mass of peasants, this period is far better than what came before or after, and they love Robert for this.

There’s a telling incident during the initial skirmishes between the Lannisters and the Tullys, before Robert dies and the conflict breaks out into open warfare. A Tully village is sacked by soldiers disguised as bandits. We learn of this from Eddard Stark’s perspective, when the survivors approach the throne to appeal for justice. This is a pivotal step forward in the plot, but also a striking illustration of how the society is functioning: the peasants believe they can appeal to the king and receive justice. Under the reign of an Aerys or a Joffrey, such an appeal would be unlikely to occur and less likely to be granted. Under Robert, however, their faith is not misplaced. Eddard, acting in Robert’s stead, dispatches soldiers to stop the raiders.

The obvious objection here is that the quality of Robert’s rule is merely due to his advisors. Robert himself lacks the interest or ability to govern, and everything is handled by his council. The peasants in the example above spoke to Eddard because Robert was away hunting, and even if he were not, he would have found some excuse to make Eddard do his job. The realm runs smoothly because of the decisions of men like Eddard Stark, Petyr Baelish, Varys, and John Arryn, not Robert Baratheon.

This is true so far as it goes. However, it is Robert who chooses these advisors and keeps them in line. Robert is an excellent judge of character and ability who entrusts matters of state to those best fitted to the roles. Some of his choices show Robert’s reliable competence, such as appointing Arryn as the King’s Hand, or Baelish as treasurer; others show his inspired genius, such as pardoning his former enemy Barristan Selmy to be commander of the Kingsguard. All of Robert’s picks are highly talented, and all are reliable enough while he lives.

Notably, several of these lieutenants turn rogue after Robert’s death in ways they would never have dared during his life. While Robert reigned, Baelish embezzled from the treasury, and once went so far as to send a proxy to poison an old man, whose death was assumed to be natural. Varys kept his sources to himself, but reliably passed his information on to the crown. He even sent an assassin after Daenerys, the prized pawn of Varys’s co-conspirator, rather than disobey Robert’s order to have her killed. These men are opportunists who have a good sense for how far they can push Robert, and never cross the line for fear of his retribution. Once Robert is gone, Baelish and Varys grow bold and uncontrolled, and both eventually murder their lieges with their own hands.

For all his disinterest in the administrative details, Robert is able to manage his subordinates effectively, giving them enough of what they want to keep them working with the system, while making it clear that excessive disloyalty will be crushed. His fascination with tournaments is actually an asset here: it provides the younger generation of knights and young lords with a way to keep busy and win martial glory without getting into costly wars, thus stabilizing a key component of the realm.

However, Robert has a crippling flaw as a leader: he is paying little or no attention to his succession. This leads directly to the civil wars which break out immediately after his death. In a kingdom like Robert’s, where many powerful actors are held together only by the will and skill of a single monarch, that monarch is obviously a massive vulnerability. A good king has two options: either ensure that there is a successor who will take over and continue managing the system, or else restructure the society so that a single powerful leader is less necessary. These methods both have their pros and cons, but Robert does neither. On the one hand, he leaves the position of king as central and powerful as it was when his reign began. On the other hand, he neglects his presumptive heir, making no effort to ensure that Joffrey has the skills or temperament to be a good king, and also neglects the political problems surrounding the succession (in particular, the tensions with Robert’s disaffected brothers and their claims to the throne).

This is why, as soon as Robert is dead, the entire system flies apart and an era of bloody civil war begins. He had the skill to keep the entire complex system under control, and his successors did not.

The Vocabulary Of Power

The mechanics of power are complex and easily misunderstood. Modern English vocabulary on the subject does not help; it is often imprecise and equivocal (e.g. the word influence), lumps together different types of power (e.g. authority), and frequently conflates power and morality (e.g. rights). The result is that it’s difficult to think clearly about how things work without resorting to nonstandard terms.

The ancient Romans used much clearer concepts to talk about power. This is not surprising, considering the Roman obsession with the subject. What follows are the four most useful concepts I’ve acquired from studying Roman ideas about power.

(I should note that I do not speak Latin. I learned this mostly from translations and secondary sources, and only a little bit from actual usage. I am likely missing some nuances at the very least. Nevertheless, I’ve found these concepts to be extremely useful for understanding the modern world.)


Imperium refers to control over violence. It was held by the imperator, the commander-in-chief of an army. He held the power of life and death over his soldiers, and through them, over everyone in the territory the army controlled.

No other type of power can block the use of imperium to destroy, but on its own imperium cannot be used to build. It is the most fundamental type of power, but also the crudest.  Imperium is the type of power to use for conquest, expropriation, and extortion, as well as for enforcing legal decisions or defending against others’ aggressive use of imperium.

Imperium survives in English in the word emperor, via imperator, which was among the titles of what English-speakers call the Roman Emperors. In modern usage, the term closest to the original meaning of imperium is the monopoly on legitimate violence. However, the Latin term avoids the connotations of moral or social approval which sneak into the English term.

Potestas refers to formal control in a nonmilitary organization. It is the type of power your boss has over you. It can be held by a CEO over a company, a principal over a school, or (in Roman times) a patriarch over a household.

This is the most common and visible form of power, and also the easiest to understand and use. Nearly every worthwhile project requires potestas to achieve the close internal coordination that is the foundation of any effective organization. A holder of potestas is always embedded inside the domain of a holder of imperium and relies on it for defense against some threats. Potestas is the type of power to use for “normal” hierarchical projects like restaurants, software companies, nonprofits, or the IRS, where it’s important that specific tasks get done reliably and on time.

The words potestas and power both come from the same root, potis. Power remains the closest English equivalent to potestas, as a relatively generic term that matches people’s everyday experience of formal control, although it is less precise than the Latin.

Dignitas refers to a rough amalgamation of wealth, formally-recognized accomplishment, family or class, connections, and charisma. It is held by politicians, magnates, and other leading figures.

It is more nebulous than imperium or potestas, and exists somewhat more “in the eye of the beholder”, although beholders have a remarkable tendency to reach the same conclusion. When used as a means, dignitas serves mostly to amplify other powers or skills. If used on its own, it must usually be piloted skillfully in order to accomplish anything more noteworthy than the acquisition of groupies. Yet, for many people of moderate ambition, dignitas takes on the character of a goal in itself. Dignitas is the type of power to use to get introductions and gain access, or to gain renown for its own sake.

Dignitas is, of course, the root of dignity. However, the closest word in modern usage is status. The difference is that status is about a person’s relation to their immediate surroundings (and so is highly context-dependent), whereas dignitas is about a person’s relation to their entire society (and so is context-invariant).

Auctoritas refers to the public recognition that a person has the appropriate standing to decide (or at least opine on) particular topics. In the context of ancient Roman politics, this described the power of the Senate, a judge, or an influential statesman. In the modern world, a parish priest holds substantial auctoritas over his congregation, while journalists wield some auctoritas over society as a whole. Constitutional monarchs still hold a great deal of auctoritas even if they rarely use it.

Of the forms of power described here, this is the most subtle. It is more than persuasion yet less than command. Like dignitas, auctoritas has a nebulous quality, although auctoritas is somewhat easier to codify and attach to formal roles. Like potestas, auctoritas applies only within a particular domain. Auctoritas is the type of power to use to guide a movement, change a culture, or spread an idea.

Auctoritas is the root of authority, although the modern English term refers to an unclear and inconsistent combination of potestas and auctoritas. The closest modern equivalent to auctoritas is legitimacy. The difference is that auctoritas is not necessarily so formal and codified, nor as moralistic.


These words are a closer match to the underlying mechanics of power than anything in modern English. I’ve found that much of the world, and much of my own life, is easier to think about in terms of these powers and their relations.

Production Of Elites In The Roman Republic

The Roman Republic was notable for producing an extremely large number of great men. Per capita, I know of no other civilization that came close, except for the Greek city-states which preceded Roman society and served as its template. I believe this was because the entire society was set up to produce elites who were extremely powerful and extremely ambitious.

The ambition component is relatively straightforward. The Roman ideology emphasized civic accomplishment and glory as routes to social standing, power, and immortality. I don’t know all the mechanics of how they accomplished this so thoroughly, but there are many pieces that point strongly in this direction, e.g. Polybius’s description of Roman funerals, or the practice of building public works with one’s own money to support one’s election to the Senate.

The power component was more complex. It depended on two pieces: giving elites a solid base of power, and giving elites an excellent training ground. As in most pre-industrial societies, the primary economic unit was the household (whereas today the primary economic unit is the company). Even compared to other ancient societies, Roman law and culture gave the head of household extreme power over their family. For example, children did not have separate property, including unmarried adult children, and a patriarch faced no legal punishment for killing his own children or slaves. Practices of this type, combined with the feelings people naturally have for their immediate family, made households internally coordinated to a ludicrous degree. For instance, you didn’t have to worry about your second-in-command leaving to work for a competitor, because law and custom were on your side if you physically drag him back. Thus, a skilled patriarch would have a power base that was effectively immune to most attacks short of murder. This greatly lessened the Problem of Local Focus, making the household much more formidable. The coordinated household could expand by adult adoption, or by acquiring slaves. This sometimes included very skilled slaves such as doctors or businessmen, who could be rewarded with freedom and become loyal clients if they served well.

In addition to this power base, the elites also needed the skill to wield it effectively. The Roman solution to this was simply to throw them at the world face-first. Well-connected teenagers would often serve an apprenticeship as a staff officer to a relative who held a  military command. At the age when modern people are in college or grad school, Roman elites would be magistrates, colonial administrators, or military officers. A politician would have to organize and execute an election campaign while in his early twenties. And of course, a man had to lead his household as soon as he married or his father died. (Julius Caesar inherited his father’s household—and his political enemies—at the age of 16.) While the specifics varied from case to case, a Roman elite was immersed in the work of power from a young age.

Children’s education was arranged by the family rather than the state, so a father might teach his son what he’d learned in the Senate, or hire a Greek philosopher to instruct him in rhetoric, or have him direct the slaves on the farm. This allowed family traditions of knowledge to be created and passed down.

This is a high-variance strategy, and I assume some elites didn’t do very well; presumably their performance was noticed and they lost the relevant elections, or were passed over for the most important posts. However, a notable fraction learned extremely well from contact with the object of study, and these were the people who made Rome into a paramount society that could serve as the foundation for Western Civilization.

Mercantilism Was Not About Economics

According to the dominant historical narrative, mercantilism was the economic theory prevalent in early modern Europe, until it was replaced when Adam Smith and other Enlightenment thinkers founded the current economic paradigm. Many historians challenge this view, and with good reason. In this piece, I will explain why the dominant view is wrong, and propose an alternate explanation: mercantilist policies were not the result of an economic theory at all, but were the result of state actors seeking to centralize power. Recasting these policies as coming from an economic theory was a rhetorical move that Smith and other early economists used to establish their own legitimacy.

There are several problems with the claim that mercantilism was an economic theory. The clearest is that the ostensible theory was not even named until later: “this term [mercantilism] was initially used solely by critics … but was quickly adopted by historians”, as the linked wikipedia page says. I’m not sure if the alleged mercantilists even considered themselves to be part of a continuous tradition of knowledge.

Less obvious but more important, to the extent that there is a mercantilist theory, it is a monetary theory and not an economic theory. To distinguish: by an economic theory, I mean a theory that explains the important facts about goods and services. By a monetary theory, I mean a theory that explains the important facts about money. (The difference between these would have been even more blindingly obvious in the early modern period than it is now, since prices fluctuated much more wildly then, especially food prices. So, it’s not the case that nobody noticed the difference.) The mercantilist focus on gold and silver is striking; the consistent pieces of policy (pursuing a positive balance of trade, high tariffs, often literal restrictions on exporting precious metal) are all aimed at causing effects on the landscape of money rather than on the landscape of goods or services.

If mercantilist policies weren’t the articulation of an economic theory, then what was going on? I believe mercantilist policies were the central government’s solution to the problem of taxation. While modern governments can impose taxes almost arbitrarily, early modern governments could not. Royalty made money from the farmland they owned, but as the economic center of gravity moved from the farms to the towns, this became less important, and they needed more money. The royalty lacked the local knowledge and “boots on the ground” to collect taxes outside of their demesne, and so had to act through the local power holders. In the manors, this meant acting through the nobility. (That’s a complicated topic beyond the scope of this piece, so I’ll just gesture at the British Parliament and the civil wars that accompanied its origins as an example of the power struggles this provoked.) In the towns, this meant acting through the guilds.

It wasn’t practical to simply extort money from the guilds, so they ended up in a more symbiotic relationship with the state. Essentially, the deal was that that the state would use force to shut down the guild’s competition, and in return the guild would pay taxes and help administrate their collection. In other words, the state would sell a monopoly to the guild. The guild would then submit to the collection of tariffs, or to paying duties on their merchandise, or some other tax on their transactions. (Notably, I know of no cases in this period where income or wealth were taxed directly. States couldn’t get away with that until later.) Jean-Baptiste Colbert pursued this policy more brazenly and systematically than anyone else I’ve looked at.

Through this lens, the mercantilist policies make more sense. The focus on money was because the purpose was to collect money, and so the central government wanted to bring more money into the country and track it as precisely as possible. The hodgepodge of regulations follows no systematic rule of economics, but does follow the pattern of a symbiotic trade between the state and the guilds. For example, a punitive tariff on imported wine will raise some money for the state, and more importantly, it is a favor to the domestic winemaker’s guild (which pays taxes, unlike foreign winemakers). Granting a monopoly to a favored shipping company makes no sense as an economic policy, but does make sense as a taxation policy.

Of course, whenever the state is pursuing a course of action, there will arise a demand for intellectual arguments that the state policies serve the common good, and thinkers will arise to fill this demand. Such thinkers made arguments for mercantilist policies, and some then generalized these arguments and made further recommendations. However, I have seen no evidence that these thinkers were influential or their recommendations adopted, and suspect that they had negligible effects.

Nevertheless, these intellectuals made a convenient foil for Adam Smith and his peers. By casting them as his foes, Smith was able to demolish them and demonstrate his superiority, thereby associating his own program with progress and rationalism, and leaving his opponents no intellectual ground to retreat to. (Smith was a capable persuader with sophisticated models of his audience, although many of his peers were not.) I think the real story is that Smith’s program was possible because his true foes, the guild merchants, were no longer necessary to the state due to the institutionalization of taxation infrastructure and/or the nascent factory system. However, because every historian of economics has read Smith, his account is widely known; and because his narrative of progress and rationalism matches modern sensibilities, his account is widely accepted.