the free market
was interested to read Pejman Yousefzadeh's response to Studs
Terkel's analysis of the New Deal's impact on the Depression and
the U.S. economy ("Letters," August/01). The writer criticizes
Mr. Terkel's crediting of these programs and then credits World
War II as the engine that drove the economy back to health. What
is curious is his conclusion that it was the free market that
remedied the economic ills. Isn't war a government policy and
wartime spending on the military simply a different form of government
spending? Wasn't it government contracts with the military industrial
complex that drove production and created those jobs?
point he seems to miss is not that the New Deal created long-term
jobs, but that the creation of the Social Security System, the
Federal Deposit Insurance system, and many other programs restored
citizens' confidence in critical U.S. institutions, including
the economy (Alan Greenspan has mentioned consumer confidence
as an important indicator of economic strength), and did support
those less able to support themselves (the research on the impact
of Social Security on reducing poverty among senior citizens is
pretty clear). As a fairly recent graduate, and probably a relatively
young person, Pejman should be forgiven for historic nearsightedness.
Paul Tainsh, AM'77
Brooklyn, New York
not an economist, and I don't usually spend my time pedantically
picking out misstatements in letters to the editor of the University
of Chicago Magazine, but the arrogant tone of Pejman Yousefzadeh's
rejoinder to Studs Terkel was irksome enough to rouse me to action.
Yousefzadeh cites World War II as the cause of American economic
recovery in the mid-20th century and concludes that "free-market
forces are more powerful than government intervention in remedying
economic ills." Insofar as worldwide depression caused by the
untrammeled free market caused social unrest that fueled the rise
of dictatorships in the 1930s, perhaps World War II was the product
of the free market.
I'm having a hard time getting my head around the concept that
war is not government intervention-that it is not, in fact, one
of the most massive and costly government programs there is.
Zorach, AM'94, PhD'99