What Caused the Great Depression? Austrian Economics & the Conspiracy Against the Gold Standard

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💬Learn about history, economics, and the humanities at large with CallMeEzekiel in this fun and informative video presented in the Polandball/Countryball style.

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[CallMeEzekiel]

*💬Bonus reading below: Leftists and Austrians on Inflation.*

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*Bonus reading:* Leftists are usually reluctant to adopt the (traditionally right-wing) Austrian view on any aspect of economics. But I believe that there may be common ground on defining and understanding inflation. In the Austrian’s view, inflation is categorically an act of class warfare by the rich against the poor. You see, most economic schools define inflation as a general rise in prices. The Austrian school defines inflation as any increase in the money supply - regardless of its effect on prices.

This matters because, if the economy is growing and there's no increase in the money supply, everyone will become wealthier without any need for an increase in wages. Let’s say that workers in the food sector produce 10% more food each year. This will naturally cause the price of food to go down. Any worker that purchases food (all of them) will become wealthier as they can now either buy more food or buy the same amount and spend the money they save on another good or service.

In an environment of 0 inflation, the workers will directly benefit from their increasing productivity without any change in their wages because the underlying value of those wages increases on its own. This is the approach to inflation that the Austrians advocate for. But since other schools only care about changes in prices, the workers get screwed.

If government policy is to increase the money supply in such a way as to keep prices unchanged, then the working class loses 100% of the benefits of their increased productivity. Austrians consider this to be inflation because the money supply is increasing, while rival schools do not because there's no change in prices. Even worse is that this stolen value is being taken by the government who will almost certainly use it to lower the interest rates and lend out that money to capitalists. (But only those capitalists who the government likes, and not those who are best able to use it.)

To sum up: In the name of “stabilizing prices, ” “stimulating growth, ” “lowering interest rates, ” or any other nonsense, non-Austrian economists enrich themselves by robbing the working class. Inflation is a tax on the poor whose proceeds almost universally go to the rich and well-connected. It is a vile act of class warfare that leftists and Austrians alike should oppose.

[TheFirstVonGunther]

Ezekiel going from a man who explained how to play Hearts of Iron 4 to one of the selectable leaders in Hearts of Iron 5

[nadams_]

This honestly explained the reason for the Great Depression’s slow recovery way better than my economics class

[joeykickassery]

This was excellent. The synthwave aesthetic as the backdrop for the 1930's was a bold move, that paid off.

[REVOKE-EXISTENCE]

ngl, the art for call me ezekiel's vids are god-tier. Keep up the good work! 👍

[sylviamontaez]

arguably government intervention in the case of passing the smoot-Hawley act, which increased tarriffs and led to tariffs placed on americans products by other countries in retaliation, made the depression worse.

[PakBallandSami]

in most affected countries, the Great Depression was technically over by 1933, meaning that by then their economies had started to recover. Most did not experience full recovery until the late 1930s or early 1940s, however. The United States is generally thought to have fully recovered from the Great Depression by about 1939.

[marcanton]

The US printed vast amounts of money during this pandemic, do you think we are going to see huge loans to foreign central banks?

[Jfunkey]

I hope we get more of these Synthwave videos. The aesthetic works incredibly well with Polandball. At least for every economics lesson.

[kysilar]

This video hits a bit different than your previous ones. It left me a bit unsatisfied / wanting to hear more about it.
It took me rewatching older videos, and this one a few more times to figure it out.

Let me just start with the deserved praise about the production value that somehow keeps getting better and better every video.
The art work is amazing as always, and somehow manages to get even better every video.
The stylish neon / synth music also sets a really good theme.

The one thing that didn't quite work for me personally (not saying this as fact, just what I think) is the storytelling / script.
Past videos had a more chill attitude of:
"This is how Anarcho-Capitalism sees it."
"This is how Libertarian history sees it."

But this video's narrative is a lot more direct / confrontational, stating that what we traditionally known is a lie and Austrian economics can give us the real answers.
Now in the past you've done something similar. The brilliant two part "How to take down a Monopoly", started out pretty strong.
But over those 26 minutes we went step by step following Standard oil & Royal Shell + The extra reading of "Breaking Rockefeller" afterwards.
It changed my opinion on the matter, and remains one of my fav. videos you've made.

I really feel that this subject deserved the same treatment. Multiple parts, a more in depth look, a nice chronological story to follow,
and more after-the-credits reading would have been great. Even after multiple viewings I'm still a bit confused.

I will pay you money to go slower / explain more in depth. The subject is arguably bigger than the one from "How to take down a Monopoly" but the time is less than half.
I'd love for you to give this the extra time it deserves.

[CV-juul]

Comment section:
33% saying "based"
33% saying they didn't get it
33% angry at austrian economics

Great video. So many of these interventions really did nothing but worsen and promote the structural issues in the economy.

[sw_nerd]

The video singlehandedly turned me from Keynesian to Austrian Economics.

[PakBallandSami]

“First the strangers came with argument and authority and gunpowder to back up both. And in the four hundred years Kino's people had learned only one defense - a slight slitting of the eyes and a slight tightening of the lips and a retirement. Nothing could break down this wall, and they could remain whole within the wall.”
― John Steinbeck,

[heitorkrammel]

The dud I met for teaching me a videogame just told me Austrian economics

This is such a good summary of Murray N. Rothbard's America's Great Depression that I'm going to recommend it to a friend who is interested in economics instead of going through the "Trouble" of reading it!

[KageMinowara]

>Interventionists try to interfere with the economy

Economic Downturn: "How many times do I have to teach you this lesson old man?!"

[generalnutmeg]

I’m really loving the 80s aesthetic that you’re going for in your videos.

[MahDryBread]

The great depression never would have happened if we had Kane in office!

[silesiaball]

Talking about 1920/30s Great Depression with 1980s synthwave. Nice

[dclark]

Oh man, poking the bear now!

Pretty good video.

I find that Austrian economists understand how the systems work better than the others. There is room for interventions, IMO, but it must be explicitly understood that interventions are INHERENTLY inefficient and will delay recovery...and that interventions should be done for limited and easily understood causes...i.e. basically to allow a more orderly realignment of the market. Voters should also understand that interventions are almost universally designed to allow the capitalists (those most invested in the previous system) extra time to adjust to the new conditions. This time is bought at the expense of the poorly connected among society.

I remember shaking my head at all the discussions surrounding the Greek debt crisis a decade ago...and I am now amused at the GOP and Dems in the US attempting to blame each other for the current inflation...inflation that has been the direct result of both parties monetary policies since the 2009 crisis.