By any account the Great Depression was a terrible event in the history of our world. Precipitated by a massive stock market crash on 29 October 1929, it carried on for a decade and turned the global economy on its head. It also precipitated the modern welfare state, leading for the first time to massive government involvement in the economic affairs of most Western states. The Forgotten Man: A New History of the Great Depression by Amity Shlaes, first released in 2008, is a book that examined the Great Depression from a free-market perspective and argued that it was unnecessarily prolonged by state involvement in economic affairs and it was largely this government interia that was to blame for it lasting up until the Second World War. The book reviewed today is the graphic retelling of Shlaes' book, released earlier this May and drawn by Toronto-based artist Paul Rivoche.
|The Forgotten Man: A New History of the Great Depression (Graphic Edition), Amity Shlaes & Paul Rivoche, Harper Perennial, 2014, $19.99 (US)|
Of course, the "dismal science" as Thomas Carlyle described it, is massively complex and rooted in a long and debated history. Indeed, it's almost impossible to debate economics without getting political and at times it's easy to predict a person's stance on a smaller issue if their other, economic view is known. So to provide a little background we'll firstly take a broad look at the history of economics with the hope that you leave this review with a better sense of what the debate is all about.
Although humans have been trading since the dawn of time, for the sake of brevity, this account will start with an entity that emerged when the medieval period transitioned to the early modern: the Joint Stock Company. First introduced in the Netherlands with the Dutch East India Company, followed shortly thereafter by the English East India Company, the Joint Stock Company was a means by which individual investors pooled their wealth in the form of joint-ownership of a larger venture in order to mitigate the risks that came with sending ships to far-off lands in search of wealth. The investors of Joint Stock Companies reaped the rewards if their ships returned, but could also transfer (sell) their shares if they needed to as well.
|Print of the Dutch East India Company shipyards 1726 by Joseph Mulder.|
The rise of this new corporate structure coincided with the rise of what was later named "Mercantilism" and the two went hand-in-hand. Mercantilism was a form of state-sponsored economics that involved governments using their military and laws to prevent their colonies (mercantilist countries were almost universally European) from trading with anyone else. Naturally, this encouraged the proliferation of Joint Stock Companies, which were created by their respective Crowns, but also encouraged resentment in some of the more enterprising and prosperous colonies of the world: the Thirteen American colonies being a prime example of this.
So in the same year that America started its revolution, Mercantilism was challenged outright by an intellectual from the most powerful mercantilist state in the world: Great Britain. Beginning in the late 17th-century, Europe and America underwent an Age of Enlightenment. The Enlightenment was a period when the prominent thinkers of these continents, turned towards an emphasis on reason and individualism rather than tradition. Scotland, having joined England to form the United Kingdom in 1707, had an especially robust period of enlightenment and it was one of its thinkers that emerged as the most coherent voice for Enlightenment-based free market economics. His name was Adam Smith.
|Statue of Adam Smith on the Royal Mile in Edinburgh, Scotland, UK.|
Born in Fife, in 1726, Smith was educated at the universities of Glasgow and Oxford before returning to Edinburgh to continue his work at the university there. In 1776 he would publish An Inquiry into the Nature and Causes of the Wealth of Nations, now most often known by the latter portion of its title. While this book cannot be called a manifesto or polemic of capitalism, it is still largely regarded as the seminal treatise* in what is now labeled Classical Economics. In Wealth of Nations Smith spoke of the enlightened self-interest of economic trade as well as the danger monopolies had to the economic betterment of a country. He wrote:
A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate. The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken, not upon every occasion, indeed, but for any considerable time together. (Book 1, Chapter 7)
In the late 1700s something also started in the UK that would change the face of the world: the Industrial Revolution. While not a revolution in the flag-waving sense, it transformed economic production into something almost unrecognisable only decades earlier. Gone were small rural cottage industries and large land-holders extracting wealth from tenant farmers, to be replaced by steam and coal powered factories in massively expanding cities which were populated by low-skilled workers. Of course, as the established economic order was turned on its head, critics started to emerge, most notably German radicals Karl Marx and Frederich Engels.
Marx and Engels, writing in their critique Das Kapital (1867) saw capitalism as an inherently exploitative relationship between the capitalists and workers. Because the workers were paid for work at a fixed wage, they contributed more than they received from their wages and were kept in chains by this relationship. The naturally corollary envisioned by Marx and Engels was the workers of the world uniting to end this relationship in a worker-centred socialist utopia. This notion, argued for in an earlier polemic The Communist Manifesto (1848), saw a socialism of armies of workers; state control of credit and banking; and the near complete state dominance of all areas of economic production.
|The grave of Karl Marx in Highgate Cemetery in London, UK.|
Decades later when the Great Depression came around, there was debate as to how to deal with it. The prevailing thought in the United States remained the classical liberalism of Adam Smith but this wasn't universal: only a decade earlier the Russians had turned to Marxian socialism in their revolution of 1917. So while the United States never came close to becoming the next socialist republic, it was British economist John Maynard Keynes, already famous for his critique of the Versailles treaty, in his work The General Theory of Employment, Interest and Money (1936), who rose to challenge the established economic order. Keynes argued that in order to save capitalism from itself, (and thereby turning any communists aside) government needed to step in and spend massively on infrastructure to get the economy moving again. Keynes based this on the idea of Aggregate Demand determining the overall health of an economy and when the private sector led to inefficient macroeconomic (large scale) outcomes, it was the public sector that needed to step in and pry the pump. This could include massive spending projects like bridges, buildings or public works, but could also include just paying people to dig holes and then paying others to fill them in again. Keynesians belived that if people started working, they would buy things and this would cause upward spiral towards economic prosperity.
Neo-Keynesism found a home in the aftermath of the 2008 Financial Crisis with even conservatively-minded governments in the United States and Canada implementing massive spending programs. For example, George W. Bush's Troubled Asset Relief Program (TARP) saw the US government buy assets and equity from financial institutions in order to shore them up. Across the border, Canada's Economic Action Plan involved massive spending on roads and other public infrastructure. More recently, Quantitative Easing which sees central banks such as the Federal Reserve or the Bank of England buy specified amounts of financial assets from commercial banks (Citibank or RBS), thereby pushing the prices of these assets up and raising their prices, all the while increasing the amount of money in the economy.
|Lawyer and long-shot GOP 1940 Presidential candidate, Wendell Willkie narrates The Forgotten Man. The portions of the book where he tells the story are done in red. The rest of the book is black and white. All art by Paul Rivoche.|
All of which brings us to the The Forgotten Man and its examination of the push-pull of government control over the economics of the Great Depression and the "New Deal", a Keynesian effort by President Franklin D. Roosevelt and his brain trust to exert more state control over the economy. The story is faux-narrated by Wendell Willkie, a long-shot Republican party candidate for the 1940 presidential election who saw state-encroachment of the economy, not as a good thing, but as an interfering menace that stood in the way of real recovery by stifling ingenuity and market correcting forces. Below are some images, and if you read carefully, you'll notice the debate between state and market forces and how they are manifested in political debates around other issues including income inequality or wage and price controls.
|At the 1932 Democratic Convention in Chicago candidate Franklin D. Roosevelt, the patrician New York State governor took his party, which was made of up liberal northerners and conservative southerners, to the left of the political spectrum.|
|A depiction of the ligitation of the case A.L.A. Schechter Poultry Corp. v. United States.|
The Forgotten Man also walks the reader through not only the economic debate and the FDR advisers, but also the legal dimensions of the New Deal policies as well. A.L.A. Schechter Poultry Corp. v. United States (1935) was one of the cases before the Supreme Court of the United States that saw Americans challenge FDR's laws and in this particular instance saw that honourable court render the National Industrial Recovery Act unconstitutional. In this instance the debate centred around Schechter Poultry selling chickens, but also focused on wage and price controls, work hours and unionization. The Court found in favour of Schechter but this did not stand in the way of more centralizing laws and soon even SCOTUS would relent, ending soon after what is called the Lochner era of American jurisprudence.
|The view from the SCOTUS bench in The Forgotten Man.|
|The Lochner Era, from the decision of Lochner v. New York, 198 US 45 (1905), a period of laissez-faire judicial decisions based on liberty of contract and the 5th and 14th Amendments, ended in the mid 1930s.|
After the policy and the ligitation, The Forgotten Man takes the reader to the place where poverty and economic downturn hit the hardest: the life of the everyday American. Indeed, the book's core thesis is that it was the centralizing decisions made by a powerful political and legal elite (as well as their benefactors who ran the programs) that were the real sources of the pains of the Great Depression, with the victims being the namesakes of this book. Rivoche's art works very well at portraying these men, women and children and the starkness of black and white works brilliantly with the overall message.
|Paul Rivoche draws a collective farm.|
All of which makes this story of economics, law and history a very enjoyable read. Indeed, if you enjoyed the prose edition of The Forgotten Man you will most certainly enjoy this book too. Amity Shlaes' lessons are masterfully told by Paul Rivoche and although the ideological slant might not be your cup of tea, it is never-the-less a thought provoking account of the Great Depression. Admittedly, I tack towards the author in terms of my own economic and political thinking, but please don't let that take from the valuable lesson and photo-realism that makes this book an excellent addition to anyone's library of history or sequential art. Economics is a topic that in all likelihood will be forever debated, but it is my hope today that you're leaving WGTB with a better sense of the topic. 4/5 STARS
*A treatise is a formal, systematic and written examination of a singular subject. They are typically longer than an essay and go to the very essence or principles of the subject.