Conversations with Tyler · Mercatus Center at George Mason University

George Selgin on the New Deal, Regime Uncertainty, and What Really Ended the Great Depression

October 15, 2025·1 hr 9 min·4 clips

Selgin tells a conservative Cato audience that Keynes gave the best advice on the New Deal — and backs it up with specifics.

The frame is monetary judgment. The host introduces George Selgin at Cato through a long acquaintance and Selgin's book False Dawn, which covers recovery from 1933 to 1947. The conversation keeps circling one question: did the policy advice match the theory, especially when gold-standard commitments ran into the goal of stable spending? Selgin does not soften the answer. He sees a real gap between theory and practice. Hayek's focus on spending stability sat badly beside advice for austerity and defense of the gold standard. Chicago does not get one clean grade either. Selgin says the early Chicago economists were not the fiscal conservatives later memory sometimes turns them into, since many backed large public works before Keynes. That matters because it makes Depression-era schools harder to sort into neat boxes. Fisher looks better in Selgin's telling. Selgin notes that Fisher was at Yale, not Chicago, but treats him as an honorary Chicago economist because Fisher favored a managed fiat dollar. Simons does not fare as well. Selgin rejects Simons's attack on fractional reserve banking and argues that bad regulations explain the crisis better than the banking structure itself. Canada becomes the test case. For Selgin, its lack of a banking collapse shows that fractional reserves did not automatically lead to disaster. The closing question pulls the lens wider. With Argentina and dollarized economies in view, the issue becomes whether monetary institutions explain national wealth. Selgin keeps the answer cautious: poorer countries may dollarize because they are already trying not to get poorer.

As heard by us

Selgin and Cowen on the Depression-era economists who got it right, and the ones who didn't.

George Selgin brings decades of revisionist monetary history into a conversation with Tyler Cowen built around his book 'False Dawn: The New Deal and the Promise of Recovery, 1933 to 1947,' which Cowen calls the best book on its topic.

Read the full review in PlayNext →

Why you'd press play

You have probably never heard the New Deal evaluated quite this rigorously, or quite this fast.

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from Conversations with Tyler