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demand, which in turn decreases production further dropping income and demand in a never-ending downward spiral. Keynes theorized the way forward was to stop the downward cycle by a jolt of government intervention, translation—the government should spend a lot of money. Keynes’ theory, for the first time in economic history, attempted to show why classical economics could not reverse a depression cycle. Classical economists claim both Hoover and Roosevelt tried Keynes’ methods, to different extents, and they flopped. Keynesian economists argue his ideas were not properly implemented by either administration, and they say Roosevelt’s actions did work to relieve the depression.

Modern liberal economists argue that classical economics failed in the Great Depression, and that Keynes’ methods were not really tried as the government did not spend enough money. The student of history should note that classical economics were not tried at all. Hoover did not decrease taxes, lower regulations, lower tariffs, or otherwise get the government out of the economy as recommended by classical economics. In fact, Hoover and Roosevelt raised taxes, increased tariffs, increased regulatory intervention, increased uncertainty in the business world and did everything the classical economists said NOT to do. Even today, governments the world over do not respond to economic trouble by getting out of the way and decreasing taxes and regulations. Some of this stems from the Great Depression and the concept that classical economics failed. If they knew history they would know otherwise. This false concept still influences government economic decisions. History, and a real understanding of what actually happened, is critical for decision making.

European Government’s under Stress: Fascist and Communist

The economic chaos of the Great Depression led to disillusionment with democratic governments in Europe, and radical governments began to replace democracies. Pushing this change was a new ideology supported by a major world power, the USSR. The communists in Moscow formed revolutionary cells in nations throughout Europe and the world. These cells agitated for the overthrow of capitalist governments and their replacement with communist regimes. Communists preached that capitalism had led to World War I and the economic disaster that engulfed the world following the Great War. People seemed ripe for a change.

In response, radical movements grew up to oppose communism. Fascist parties appeared with the idea that government should control major industries and insure full employment, but the fascist rejected revolutionary change pushed by the communists. Owners of industries feared a workers revolution seizing their property. The fascists made headway, in part, because propertied people feared communism. They had good reason to, because in the USSR millions of murders followed the implementation of communist ideology. Fascists came to power in Italy (1922—Mussolini), Germany (1933—Hitler), and Spain (1934—Franco). How could the people of Europe know they were opting for one group of dictators and murderers, the fascists, over another group of dictators and murderers, the communists?

The Western Democracies: England, Canada, France, and the United States being the major ones, faced a frightening future. In a very few years, the world changed spectacularly with new untried economic and social philosophies being implemented, and murdering dictators running major world powers. England was frightened of Communist Russia (the USSR) and wanted a strong power in Central Europe to offset growing Soviet power. Since WWI dismembered Austria-Hungary into a hive of competing small nations, only Germany remained to potentially offset the USSR. Hitler assumed power in 1933, and immediately began rebuilding Germany’s military; nonetheless, Britain and France restrained their objections hoping Germany could counterbalance Soviet power. And so Germany could have if someone other than a demented dictator had assumed the helm.

Hammered in WWI, France wanted to avoid another