ABSTRACT
To many people, who today speak of unprecedented disaster, historic precedent is not only inconclusive but distasteful. The financial crisis was over before the year was out, but roughly three years of depression followed. Here is a case which exemplifies how much basis there is for the belief in the recuperative powers of capitalism. The center of economic gravity was then in Europe. At the threshold of every sensible diagnosis of any given depression lies a fundamental distinction between two different sets of causes and consequences. The chief difficulty of which lies in the fact that depressions are not simply evils, which we might attempt to suppress, but, perhaps undesirable, forms of something which has to be done, namely, adjustment to previous economic change. More important, depression in some cases produces, in other cases materially strengthens, protectionism. People may advocate 'self-sufficiency' primarily from non-economic motives.
